Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Block: Inflated user metrics and “frictionless” fraud facilitation

hindenburgresearch.com

Post reply on HN
Print view View original

151–160 of 324 posts

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

#151

Post by hef19898 »

EVa5I7bHFq9mnYK wrote: post #113
mmaunder wrote: post #25

The pre market is looking brutal: https://www.marketwatch.com/investing/stock/sq Those puts are going to pay off handsomely.

Looks like it's an easy way to make money, SEC won't do nothing of course.

Short selling is absolutely legal. Course manipulation and insider trading are not. I guess you see the tight rope short sellers like Hindenburg are walking on, right?

Also, if markets don't move following such a report short sellers stand loosing a ton of money, even if they are right.

Among other companies brought down, rightly so, is Wirecard. And they played the "mean, evil short sellers try to manipulate the share price"-card hard. So, shoet sellers do have a place in our modern financial system.

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

#152

Post by PaulWaldman »

user3939382 wrote: post #123
theGnuMe wrote: post #114

Earlier quoted context omitted.

If you cash out of the app do you get the full balance or the app balance?

That's the problem, when you cash out, you don't get the net amount listed in the app. You get a penny or sometimes even more than 1 penny less. The amount you get corresponds with the real net amount number that they've applied different rules to which is only available in your account export, only available through their website.

Not that this is acceptable, but is this just an issue with how the app is reporting money and you actually have the correct funds? Or is money actually being "absorbed" by the platform?

Both are bad, one is far worse.

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

#153

Post by dougSF70 »

dougSF70 wrote: post #97
user3939382 wrote: post #79

FYI if anyone is interested I can prove it -- Cash App is engaged in a massive stock trading fraud. I noticed one day that my books were off (down) by 1 penny. When I dug into it, I figured out that Cash App is providing their customers with conflicting reports for their stock sales. In the app, the sales report rounds pennies up, in the actual sale, whose records are only available through more complex data export p…

This is at the core of Superman III. Richard Priors' character notices his paycheck gets rounded down, he writes an app to harvest up the rounded down tenths of pennies...

I have often thought this is the business model of most payment apps.

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

#154

Post by JumpCrisscross »

boh wrote: post #142
JumpCrisscross wrote: post #119

Earlier quoted context omitted.

> moment that they have to start treating drivers like employee's they can't make money Revel, in New York, has employees and does fine.

Define "does fine". Spending and losing VC money doesn't count.

> Define "does fine". Spending and losing VC money doesn't count

Then Revel does fine.

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

#155

Post by gpderetta »

hotpotamus wrote: post #82
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 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 o…

The vast vast majority of people don't go around with a wallet full of cash for obvious reasons. If having the application installed is equivalent of going around with such a wallet, then at the very least it points to flaw.

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

#156

Post by Mizoguchi »

slymon99 wrote: post #87
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.

Not being a secret doesn't mean people knows about them. I bet most people over here have no idea they are short sellers. I didn't know and I read a lot of news. You said it yourself, they have incentive to exaggerate (I would say a huge incentive), so people should read these reports knowing this little fact. Don't you think?

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

#157

Post by codingpanic »

Weird, I use cashapp as my daily debit card. Figure it reduces overall risk by only having a set amount available for use at any time.

If I need to spend more? I move it to cash app, then spend it.

My main checking and savings accounts do not even have cards that are active. Its all cash app all the time.

Not saying they aren't doing anything wrong, just that there are plenty of legitimate uses for the service.

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

#158

Post by Mizoguchi »

mst wrote: post #143
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…

That's ... exactly how short selling reports work? There's an explicit disclosure in the piece that they've taken a short position, but really, when a short seller puts out a report like this, you can safely assume that's the case even without reading far enough through to get to the explicit disclosure. If they're right, they make money. That's what makes it worth investigating to see which companies are screwed up.

I think I understad how short sellers operate. But thanks for the information.

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

#159

Post by propercoil »

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…

When short sellers buy puts they usually buy 1-day expiring ones. The profit here can be 5x-10x the amounts stated here.

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

#160

Post by ajoseps »

rossdavidh wrote: post #67

While this doesn't look great, it doesn't really seem up to the standards of past Hindenburg reports. Block's main product is credit card processing and point-of-sales, for retailers, and they have a reputation for being the easiest to use and deal with. I could easily believe that they are not doing their KYC work and that the feds will soon make them do so, but it doesn't really seem to add up to the company being…

Cash app now makes up the majority of Block's revenue.

https://s29.q4cdn.com/628966176/files/doc_financials/2022/q4...

page 74 of their 2022 Q4 10-K shows a per segment (between Square and Cash App) breakdown of revenue

Post reply on HN