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Block: Inflated user metrics and “frictionless” fraud facilitation

hindenburgresearch.com

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Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#81

Post by lofatdairy »

numlocked wrote: post #23

"CEO Jack Dorsey has publicly touted how Cash App is mentioned in hundreds of hip hop songs as evidence of its mainstream appeal. A review of those songs show that the artists are not generally rapping about Cash App’s smooth user interface—many describe using it to scam, traffic drugs or even pay for murder." Hindenburg made a music video compiling the references that is...uh...worth watching: https://www.youtube.co…

I found this to be one of the weaker points in the research, as far as making a short case goes. If anything, the fact that it's so popular in hip hop would expose it to a much larger legitimate audience. Regardless, it's also just somewhat non-unique, Zelle is also name dropped in 22gz's Suburban, and a few Von and Durk songs, limiting ourselves only to drill rappers. Probably Venmo as well though I can't say I've heard it any songs.

The fraudulent activity is obviously a problem, but I'm not sure how to separate this association from, say, bragging about buying Gucci with drug money, street racing in a Dodge Hellcat, or performing drive-bys in a Revel.

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#82

Post by hotpotamus »

hoofhearted wrote: post #50
numlocked wrote: post #23

"CEO Jack Dorsey has publicly touted how Cash App is mentioned in hundreds of hip hop songs as evidence of its mainstream appeal. A review of those songs show that the artists are not generally rapping about Cash App’s smooth user interface—many describe using it to scam, traffic drugs or even pay for murder." Hindenburg made a music video compiling the references that is...uh...worth watching: https://www.youtube.co…

Correct. A scam here in Baltimore that keeps occurring is that the squeege kids will run up on someone unsuspecting and start cleaning their windshield. They will pressure the driver for a tip, and the driver will say they don’t have cash of course. They will say that’s cool, you can send me a tip. They ask the driver for their phone so they can look up their cashapp for them, and bam the driver got scammed. What’s h…

I mean, it's also an anti-pattern with wallets if you hand them your wallet full of cash and tell them to take a tip. A PIN is not a bad idea though.

I think this might be an actual generational difference; I feel weird letting someone else use my phone or using someone else's phone now. I can remember a time when phones were much more communal - the family shared a phone, and public phones existed, and I wonder if older folks are a bit more locked into that way of thinking. Obviously a phone is much more than a phone now however.

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#84

Post by heisenbit »

ctvo wrote: post #51
baryphonic wrote: post #28

Earlier quoted context omitted.

The report is extremely long, but having gone through the bullet points, the case seems quite overstated. 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 o…

> The report is extremely long, but having gone through the bullet points, the case seems quite overstated. I've gone through it fully, not just the tl;dr. It's not overblown. They're not saying Block is doing anything illegal, only Block is valued much too highly. The bulk of it is Block skirting regulatory requirements to acquire more users easily, and those users doing illegal things with their Cash app accounts.…

Well they are saying that Block is enabling crime and skirting regulations. Considering the overall regulatory climate change in the wake of SVB there is going to be impact on what they still can dare to do in the future. Growth limit #1. Then they are pretending to be small and thus demand big fees. If that stops profitability will be hit big tome. Growth limit #2. And their user numbers seem to be inflated. Growth limit #3. They are serving criminal niche market and are facing in general markets well capitalized and strongly growing competitors. Growth limit #4.

Now what is a reasonable price earning ratio for such a business?

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#85

Post by [deleted] »

noloblo wrote: post #17
noloblo wrote: post #7

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…

[deleted]

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#86

Post by hef19898 »

zerop wrote: post #74

Did Hindenburg ever reported Fraud and Scandals by Credit Suisse?

No idea what Hindenburg did, but Credit Suisse was massively shorted for quite a while now. I just didn't make HN front page or garner enough media attention prior to the SVB debacle.

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#87

Post by slymon99 »

Mizoguchi wrote: post #76

Lol OK.. Nathan Anderson is the founder of Hindenburg Research, a New York-based investment management firm, and a forensic financial investigator that is famous for releasing reports on alleged wrongdoing by companies. When publishing some of these reports, his company profits by short selling the target company's stocks (that is, by making a bet in securities markets that the price of the company's shares will decl…

Why are you quoting the disclaimer as if its secret, or some kind of gotcha? Yes this is a short selling firm. While they have some incentives to exaggerate, they are trying to find and expose genuine fraud because that is what will actually affect the share price. Hindenburg's record is quite good, and many of their reports have led to followup government enforcement actions.

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#88

Post by automatic6131 »

paganel wrote: post #52
numlocked wrote: post #23

"CEO Jack Dorsey has publicly touted how Cash App is mentioned in hundreds of hip hop songs as evidence of its mainstream appeal. A review of those songs show that the artists are not generally rapping about Cash App’s smooth user interface—many describe using it to scam, traffic drugs or even pay for murder." Hindenburg made a music video compiling the references that is...uh...worth watching: https://www.youtube.co…

On the one hand it's obvious that the Hindenburg people are right on this when they say that Block's app is used for criminal activities and money laundering. On the other hand that's what we get for trying to push cash itself more and more outside the boundaries of modern society. That video in a way made me root for the bad guys, a no-cash society where petty crime doesn't happen because the powers that be control…

What racial aspect? Please explain

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#89

Post by hoofhearted »

jstx1 wrote: post #65
hoofhearted wrote: post #50

Earlier quoted context omitted.

Correct. A scam here in Baltimore that keeps occurring is that the squeege kids will run up on someone unsuspecting and start cleaning their windshield. They will pressure the driver for a tip, and the driver will say they don’t have cash of course. They will say that’s cool, you can send me a tip. They ask the driver for their phone so they can look up their cashapp for them, and bam the driver got scammed. What’s h…

I don't think you have anyone to blame if you give your phone with a logged in money app to a stranger who is begging for money.

It’s a high pressure situation in the middle of rush hour traffic. They like to target unsuspecting older white people, and unaware females.

If you get aggressive, they will spit on your window, break your wipers off, and hit your car.

Things can get really ugly if you get out of your car and try to confront them: https://www.thebaltimorebanner.com/community/criminal-justic...

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#90

Post by noloblo »

noloblo wrote: post #17
noloblo wrote: post #7

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…

So for 72 puts they opened at 13.54 and hence it's 1100 $ gain per contract

The 60 puts are 3.25$ hence gain is 300$ per contract

Assuming hindenburg bought a 1000 of each 1100000 on the 72 puts and 300000 on the 60 puts as Sq block is now trading at 58$ much to jacks chagrin

That's a cool 1.4 mn $

Is this legal if so why isn't everyone doing it?!

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