21–30 of 324 posts
This is bad for Block. I hope. It's incredible that since 2008 it actually seemed immensely easier to skirt regulations and laws (under the banner of 'innovation'), and not just in finance. Just about all of silicon valley seems to have run the longest and broadest grift we've seen. This year's gonna get real interesting.
Did anyone read the report? The summary is quite short. Seems like a nothing-burger.
Hindenburg made a music video compiling the references that is...uh...worth watching: https://www.youtube.com/watch?v=StjWk3Mj-M4
That said this really seems overblown. The report seems to mostly just talk about Cash App. Square Payments, Weebly and TIDAL are not even mentioned. Afterpay is mentioned but that was a 2022 acquisition so the problems likely predate Block's involvement.
It feels weird that they're using Cash App to indict the company as a whole. A single product in their portfolio doesn't justify calling the whole company a fraud.
Those puts are going to pay off handsomely.
Did anyone read the report? The summary is quite short. Seems like a nothing-burger.
It reads a lot like what Wells Fargo did, re opening accounts, only targeting the criminal demographic.
Earlier quoted context omitted.
It is already down to 58 from yesterday close at 72 how much will the short sellers make if it opens at 58$ in half hour?
72$ puts expiring Friday are 2.54$ 60$ puts expiring this Friday March 24 are 25 cents at yesterday close So if they open at 6.54$ and 1.25$ respectively the short seller (hindenberg) potential gains from sq block short via short term puts are 6.54-2.54 = 4x100 = 400$ per contract 1.25-.25 = 1*100 =100$ per contract If they had bought 1000 contracts of each that is 400k and 100k respectively for the 72$ and 60$ sq pu…
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There are in fact millions of people who use Cash App, though it's probably less popular overall than Venmo. I know this because my wife and her friends will mention it and Venmo when talking about splitting bills. (Given the technical challenges Wells Fargo has had lately, I'm not sure who trusts Zelle.)
A lot of the claims amount to criticisms of Block's address verification functionality. But that doesn't mean Block engaged in fraud, perhaps they just have crappy address verification tech. Short of sending a human investigator out to physically verify that a given person really is located at a given address, I'm not sure what foolproof methods people use to eliminate that kind of fraud. The "let's send you a postcard with a code" method I've seen from legacy banks seems quite easy to exploit as well, just a bit slower.
The last question about merchant fees isn't fraud at all, but regulatory avoidance. Maybe the government will shut this down, or maybe they've found a loophole that Congress may want to close. It's unclear.
The least persuasive part of the report was the implication that rap lyrics imply Cash App facilitates crime.
In addition, politics being what it is, with the SVB “bailout” the Biden administration will be looking for something to show that they are not coddling Silicon Valley. Throwing a few execs in jail would send the message.
This is bad for Block. I hope. It's incredible that since 2008 it actually seemed immensely easier to skirt regulations and laws (under the banner of 'innovation'), and not just in finance. Just about all of silicon valley seems to have run the longest and broadest grift we've seen. This year's gonna get real interesting.
> Just about all of silicon valley seems to have run the longest and broadest grift we've seen. What do you mean by this