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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

#251

Post by martythemaniak »

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…

CashApp -> Settings -> Privacy & Security. Top option is to turn on PIN or biometrics to open the app, or to move money. This has been there for many, many years.

This is the 12th reply to your post and first one to point this out. I think this report is trying to ride well-off people's lack of awareness of CashApp. Kinda what they're accusing Block of doing, which is funny.

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

#252

Post by tennisflyi »

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…

Yes. No rapper cares about the UI/UX… Is subtext of songs lost on people?

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

#253

Post by rrrx3 »

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…

Been seeing some tiktoks on this exact scam being run in bars, too - a man/lady will chat the victim up, ask for their phone to put in their number, and then go to cashapp and send themselves money, and disappear into the night. And yes, no recourse for the victim at all.

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

#254

Post by heisenbit »

paxys wrote: post #232

Skimmed through the report, and all of the allegations will at most amount to a token fine. There's nothing fundamentally wrong with the company. Every bank and money transfer app out there facilitates criminals in some way. Every tech (especially fintech) company is overvalued. The market is overreacting because of Hindenburg’s past successes, but the stock price has already recovered by 10+ points since this mornin…

When IBM was hit by anti trust and entered a consent degree or when Microsoft got hit for its Explorer bundling practices it spelled the end of growth. This is not only a question of fraud and size of fines. The real question is are the current multiples in its stock valuation justified?

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

#255

Post by sam_goody »

Mizoguchi wrote: post #156
slymon99 wrote: post #87

Earlier quoted context omitted.

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?

Well, their name is "Hindenburg", the most famous crash in history after the Titanic.

The first time I heard their name I guessed they were short sellers, and two minutes on their site confirmed it.

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

#256

Post by gen220 »

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 hadn't had a credit card swiped in years, but it happened to me a month or two ago.

Whoever had my card used it for CashApp transactions (I didn't even know this was possible?), ultimately creating ~15 transactions of varying sizes, all less than $100. It took a while to unwind, and in the end my case was actually denied (!) for 1 of them.

I bet I counted as a new user, with $100+ in transaction volume. :)

Just because of this interaction, my disposition towards Cash App has tilted into the negative, and I literally didn't have an opinion on it before. Regardless of any number-juicing they may have indulged in, their fraud-detection tech has to be better, it's not doing them any long-term favors.

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

#257

Post by revelio »

lofatdairy wrote: post #81
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 h…

Funny, it seemed like one of the strongest points.

1. It's visual and memorable.

2. It leaves you wondering what the hell Dorsey and "Cash App Studios" were thinking when they promoted these guys.

3. It strongly bolsters their case that Block were asleep at the wheel with respect to criminal activity, probably intentionally.

We all know that Silicon Valley firms are obsessed with not being racist but didn't anyone there wonder what the guys were rapping about for even a second? Or why they'd name an entire song after the app? That isn't in any way normal behavior for rappers. Surely someone watched it and realized that, um, this isn't actually good PR, these guys are saying they use Cash App to pay for all sorts of criminal activity. Why? If it's once to make a rhyme then it's an artistic choice, if it's >1000 times that can't be a coincidence.

To be so blind to activity so obvious that you're literally boasting about it on stage in front of a bunch of bankers implies a massive breakdown of AML obligations. And that would indeed be short-worthy.

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

#258

Post by See-Sharply »

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…

…they’re doing a SupermanIII??!?

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

#260

Post by revelio »

zht wrote: post #218
cornholio wrote: post #196

Earlier quoted context omitted.

> illegal activities that will go away if the law cracks down on them, that is a matter of concern for CashApp investors. And indeed for any luxury brand that exists. I still don't understand how that makes the app itself a fraud.

The report reads like someone who doesn't seem to like the target demographic associated with CashApp and the type of music listed...

It reads like people who understand that under US law Block were expected to actively search for and fight criminal activity on their platform. If a rapper raps about their fav sports car then whatever, car companies aren't expected to stop criminals from driving. If they rap about paying for murders through your app, that's actually a serious legal problem for the company providing the service.
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