[HN Gopher] Block's Response to Inaccurate Short Seller Report
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Block's Response to Inaccurate Short Seller Report
Author : mfiguiere
Score : 36 points
Date : 2023-03-23 17:34 UTC (5 hours ago)
(HTM) web link (investors.block.xyz)
(TXT) w3m dump (investors.block.xyz)
| eloff wrote:
| So they're just going to call Hindenburg dirty liars trying to
| manipulate the stock price to make a buck?
|
| I think Hindenburg has a pretty solid reputation at this point.
| So what they should do is refute their points one by one with
| data. It will take effort and weeks of work, but failing that
| people will assume it's because they can't refute those points.
|
| I literally put my money against them this morning by opening a
| small short position. So far, I feel happy with that decision.
| cuteboy19 wrote:
| CEO complains about short sellers is a sure sign that something
| is very wrong about the company. Many such cases
| jchonphoenix wrote:
| This sounds eerily like the same response the SVB & Lehman CEO
| gave right before they went under.
| latchkey wrote:
| [flagged]
| VHRanger wrote:
| Wow, that article is salty garbage.
|
| Trying to pass off Adani's downfall as a USA vs India racism
| thing instead of simply a bunch of misappropriation and some
| researchers who profited from exposing rot.
| arberx wrote:
| Profiting off your research isn't a crime. Others choosing to
| act/believe it isn't up to Hindenburg.
|
| There's a reason they're listened to in the space.
| nradov wrote:
| That is a low-effort garbage article. There is nothing
| unethical about short selling.
| latchkey wrote:
| I think the unethical thing here is creating shorts and then
| publishing negative articles in order to drive the price down
| to profit from those shorts. Kind of a wallstreetbets play.
| nradov wrote:
| Nonsense. There is nothing even slightly unethical about
| that unless the short seller knowingly publishes false
| information. This is a totally normal price discovery
| mechanism in properly functioning capital markets.
|
| Wall Street traders make directional bets all the time,
| both long and short, so I don't understand your point
| there.
| latchkey wrote:
| https://www.bloomberg.com/news/articles/2023-03-23/what-
| is-s...
|
| "After researching a potential target, Hindenburg places
| a bet that the stock will decline, then trumpets its
| research publicly, using social media to get the message
| out."
|
| Update: The whole article is about the question of
| 'activist shorting'...
|
| 5. Why is activist shorting especially controversial?
| Opponents point to the ability of shorts to hoodwink
| investors by spreading false rumors before exiting a
| trade, a technique known as "short and distort."
|
| I'd argue that posting videos like this is exactly
| that...
|
| https://www.youtube.com/watch?v=StjWk3Mj-M4
|
| They are picking only black music videos and culture,
| regardless if it is true or not, in order to distort
| views. "Rap is bad", so therefore people singing about
| cash app is equally bad.
| unmole wrote:
| Again, nothing even remotely unethical about it.
| duskwuff wrote:
| > They are picking only black music videos and culture,
| regardless if it is true or not, in order to distort
| views.
|
| Can you name a non-Black musician who sings about paying
| for illegal products or services on CashApp?
|
| Picking from examples that exist isn't "distorting
| views".
| fdsavkja wrote:
| The options for dealing with bad press as a corp, 101:
|
| 1) give at least one or two reasons why the report is wrong
|
| 2) give exactly zero reasons, and then "explore legal actions"
| against the ones who broke the story.
|
| If your CEO was the same person who ran an ardently free speech
| platform, you might go with #1 just as a matter of culture.
|
| But some things, I guess, override that? But none of them seem
| very good and range from "They caught us! Let's slow them down."
| to "Don't bother Dorsey with this one, just write a response with
| Chat-GPT and hope it all blows over."
| marban wrote:
| Footer longer than the actual statement. Classic.
| pcurve wrote:
| "We have reviewed the full report in the context of our own data
| and believe it's designed to deceive and confuse investors.
|
| We are a highly regulated public company with regular
| disclosures, and are confident in our products, reporting,
| compliance programs, and controls. We will not be distracted by
| typical short seller tactics."
|
| Wow... they're not even denying anything. It reads like, "What we
| did is technically all legal".
| nborwankar wrote:
| This is also mostly what Adani did. They had put all their
| third party transactions in "disclosure" filings so nothing was
| hidden and the Indian market went "it's Adani, he's going to
| multiply our money. No worries" But when he went to global
| capital markets it brought much greater scrutiny and
| Hindenburg. Rest is history.
| velavar wrote:
| It's hard to strike the right balance here. The points raised
| by Hindenburgh are many and it will take time to study and
| respond to them.
|
| Stay quiet for too long and folks will assume the article is
| right since you haven't responded. Respond too fast and your
| analysis will likely not stand up to scrutiny because it was
| set up too soon. It makes sense that they put out a first
| statement here - it remains to be seen if they will follow it
| up with a more detailed pushback.
| quercusa wrote:
| This would probably be more effective with even a few examples of
| what they consider to be false.
| RockyMcNuts wrote:
| https://en.wikipedia.org/wiki/Non-denial_denial
| arberx wrote:
| pretty weak
| koolba wrote:
| > Hindenburg is known for these types of attacks, which are
| designed solely to allow short sellers to profit from a declined
| stock price. We have reviewed the full report in the context of
| our own data and believe it's designed to deceive and confuse
| investors.
|
| What's the track record Hindenburg being right about these
| calls[1]?
|
| Going off memory, there's been quite a few in the news that had
| some meat behind them like the recent one with Adani.
|
| [1]: Or should I say _puts_?
| almog wrote:
| They were the ones to publish the research about Nikola...
|
| It's an odd response from Block given Hindenburg's solid track
| record. I expected them to try and refute some of the claims
| but they didn't even try it seems
| VHRanger wrote:
| In general, their reputation is solid.
|
| They use flowery language, but it's very rare the facts they
| present are outright wrong
| impulser_ wrote:
| I don't know all of their reports, but the ones I do know they
| made the right call.
|
| The ones I remember were SimleDirectClub, Nikola, Lordstown
| Motors, Clover Health, and most recently Adani.
|
| I know for a fact all of these companies are trading +90% down
| from their reports, except for Adani which I think is only down
| ~50%.
|
| They definitely aren't just throwing claims out there. If they
| call you out, you future aint looking green.
| getoffmycase wrote:
| Ginkgo Bioworks, Berkeley Lights. Although targeting biotech
| during the bubble was kinda like shooting fish in a barrel.
| Seems like a lot of barely concealed fraud got VC funding.
| arberx wrote:
| They called out Nikola.
| nostrebored wrote:
| We're so far in to the fraud cycle that public companies are
| engaging in open fraud and can't even prove that their operations
| are ethical or compliant.
|
| If this happened to Stripe, do you think that Stripe couldn't
| publish information about their AML compliance process and show
| in a legally-liable way that they're on the up-and-up? Having
| worked there, I feel very confident that they could, and that
| they care enough about their customers that they would.
|
| This is really on the precipice of collapse type fraud. When
| money is easy and fomo is high, these companies get to ride the
| wave.
| duskwuff wrote:
| > If this happened to Stripe, do you think that Stripe couldn't
| publish information about their AML compliance process
|
| TBH, they're limited in what they can talk about. Publicizing
| details about AML processes (e.g. about specific patterns of
| behavior that the company associates with fraud) is likely to
| make them less effective.
| goat_whisperer wrote:
| You know who else was a "a highly regulated public company with
| regular disclosures"?
|
| Enron
| creeble wrote:
| Who is "Cash App's partner bank", and can I short _their_ stock?
| creeble wrote:
| Unlikely: OTCPK:LBPC
|
| oh well.
| RobLach wrote:
| All signals pointing towards Hindenburg report hitting home.
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(page generated 2023-03-23 23:03 UTC)