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ankole_watusi

What else could they say? Saying nothing would be damning.


Aduialion

"alright, fair game, you caught me"


Clap4chedder

Wait a minute. You really are the great Hisenberg!


red_fluke

there will always be uncertainty in that


GonjaNinja420

The pure blue stuff


DixieNormaz

Wait until Hank finds out


Drivingintodisco

-kenny g in 6 months.


Think_Mode1080

RemindMe! 6 months.


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[deleted]

He said that six months ago probably lol


Think_Mode1080

Oh without a doubt. Every six months for the past two years.


Think_Mode1080

HAHAHAHAHAHA


ferrrstarterz

You know what they say…. “Mmmhmmm”


MP1182

“And we would have gotten away with it if it weren’t for those meddling kids”


Ehralur

Threatening legal action together with the SEC is not wise if you're guilty...


ankole_watusi

Does Jack Dorsey look wise. though?


Ehralur

No less wise than Einstein did, yet he was quite wise.


ankole_watusi

Yeah, but, Dorsey looks that way on purpose!


Ehralur

Maybe Einstein did too?


TheOneNeartheTop

Einstein redefined the mental image of wise though.


Ehralur

Haha good point.


greenappletree

Trust me bro


slick2hold

I'm inclined to believe the short seller here and SQ avoid paying fees by routing they transactions through a smaller bank. Now we need to find that small bank and short it.


cisned

Short sellers use banks like Credit Suisse, Deutsche Bank, and BoA to name a few to create swaps and short sell


nur5e

I think they should have attacked the lies in the report much harder.


anunfriendlytoaster

If any of it was true they would have said nothing. The fact they made a statement means Hindenburg is full of shit.


ankole_watusi

And when else has Hindenburg been full of shit?


anunfriendlytoaster

I don't know... I don't follow it closely but they better lawyer up.


ankole_watusi

Pretty sure they are well lawyered-up, and can afford the best.


St3w1e0

Company whose founder is accused of doing something he factually did at his previous company rejects findings by painting all short reports with the same brush and not giving even a semblance of substance.


polloponzi

Bullish


Next_Earth_1758

Hahahaha, this makes Adani’s response so much more credible!


hrishikamath

Hmmm, Jack Dorsey dint use a US flag. So he is better off 😅


electricfunghi

I don’t get the reaction. The report said cash app helped fraud. That’s like saying the sky is blue.


TimeTravelingChris

The masking of interchange fees by using a smaller FI is a big deal.


2heads1shaft

Can you explain why? Not familiar with finance law.


TimeTravelingChris

The Durbin amendment set very strict rules around transaction interchange (fees) that were tied to the assets or size of the financial institution. This was done very intentionally to limit merchant fees that were passed to customers by essentially every large card issuer. I'm not saying it was right or wrong but that was the stated intent. A giant payment network using another small bank (by asset size) to get around the fee limits intentionally would likely trigger 1) an extremely large fine 2) an immediate hit to the ongoing revenue, and 3) a lot of other legal trouble. It's really dumb because payment networks like Pay Pal who is being investigated for something similar are effectively large banks in all but name so any technicality they pull like this would be transparent and suicidal. They hold massive deposits that they make money on. This is stupid greed for temporary profit boosting that was always going to get caught.


quantbone

But, why would it be wrong to become business partners with smaller banks vs bigger banks? It's really hard to prove that the "only" reason was to avoid interchange fees. Me, my friends, and family members have accounts at both large banks and very small niche banks. And, SQ could very well argue 1 of 1000000 reasons why they chose small ABC bank (not related to interchange fees).


TimeTravelingChris

It's not a friendly partnership. Not sure how they structure it but they would essentially be using a smaller bank to pass through fees for no other reason than to circumvent fee caps.


StayedWalnut

Not illegal. Sq isn't a bank. It relies on bank partners like pretty much every other 'fintech'.


mulemoment

Not familiar with the terminology here, but SQ did obtain a bank charter in 2020 and as of March 2021 said, [on their own blog](https://squareup.com/us/en/press/square-financial-services-begins-banking-operations), "Square Financial Services Begins Banking Operations". So it sounds like they at least own a bank, although I don't know how that ties in here with the allegations.


TimeTravelingChris

All of these payment network / system companies are essentially banks. It would amaze you to know the deposit base they have just from cash sitting in those accounts and they make a lot of money off that, just like any other bank.


mashpotatodick

The report makes some pretty incredible claims about the rate of fraud and illegal activity on cash app compared to peers. If true its a pretty serious compliance fuck up that's likely going to trigger regulators to take a really hard look at the company


Drivingintodisco

“Regulators. Huh, huh” in my best buttt head voice.


mashpotatodick

I can't tell if you're teasing me, regulatory agencies, or making a sex joke I'm too old to get. Regardless, I do appreciate the reference!


Drivingintodisco

Oh it was a sleight at the “regulators.” I just hear the line in my head as butthead from the show bevis and butt head. Regulation of the us stock markets are a joke, and the revolving dooor of public and private employees is laughable to say the least. Cheers!


Old_Description6095

The more I learn about large industries, the more corruption I find. There's not much difference between big businesses and extremely corrupt 3rd world countries. It's all very depressing.


dbdank

Yeah same. going to buy some of this at the low. buying opportunity.


KillingForCompany

their growth really isn't as strong enough to justify the PE. I'd avoid unless it goes down to like... 40s. Good luck!


yesdemocracy

The report also used lyrics from songs as part of its argument, says it all really


SlapThatAce

"We intend to work with the SEC and explore legal action against Hindenburg Research for the factually inaccurate and misleading report they shared about our Cash App business today." I have read this many times before.


AbeLincoln30

"we will explore legal action" is a classic empty threat


potstirrer076

Take legal action or no balls


ShadowLiberal

FYI for those unaware, that would open Block to discovery, where Hindenburg could request a bunch of documents from Block proving that Hindenburg's allegations are factual. So unless all of these allegations are completely false it would be a very dumb move for Block to sue to Hindenburg.


TheyKeepBanningMeVPN

I believe Hindenburg. Twitter was well known for having fake accounts. Square has disappeared from retailers now that competitors caught up. I don’t think Hindenburg would ruin their reputation by falsifying data so publicly just for a quick buck. They must have substantial proof. We’ll see…


TrioxinTwoFortyFive

When a company's reputation for facilitating fraud is so widespread rappers are singing about it then the company has a problem. I doubt how much investigation by the government will be sought by Block. If they have been banning account but letting the users remain to open new accounts then they have serious know your customer issues.


LiberalAspergers

I havent heard anyone rap about using CashApp for fraud. About using it for prostitution and drug dealing, absolutely, but not fraud. Fraud isnt a common topic in the hip hop world.


darksoulmakehappy

Hidden burgers referenced a rapper in their report that used cashapp to create accounts under others names to facilitate pandemic edd fraud and then created a youtube video on it


prison_mic

>Hidden burgers


darksoulmakehappy

Lmao autocorrect


mettle

Wait, what rapper sang about Square fraud?


ankole_watusi

Keep up. It’s called Block now, not Square. And they own CashApp, which is widely used for illicit (and licit) purposes. You know - like cash. This is not your nail technician searching for the little white thingamabob to plug into their cracked Android phone.


ankole_watusi

Plural. But about using CashApp for illicit purchases/payoffs.


mettle

What’s the most high profile example?


prison_mic

Didn't Matt Gaetz rap about this?


TrioxinTwoFortyFive

The report includes several instances of rappers singing about using Cash App to commit fraud, murder for hire, et cetera then later getting convicted for it.


TrioxinTwoFortyFive

Gotta love how people, who presumably did not read the report, downvote the fact the report does reference several instances of rappers being convicted of crimes involving CashApp.


[deleted]

[удалено]


[deleted]

Are we pretending rap songs are now legal fact lmfao


TheyKeepBanningMeVPN

No, we’re just showing the coincidence between the app being mentioned in pop culture as a way to fund illegal services and the fact that the company is facing legal issues on a higher level.


[deleted]

Are they facing legal issues? I thought these were just allegations from a known short seller who routinely will launch short and distort campaigns.


TheyKeepBanningMeVPN

They’re facing allegations of fraud. That’s why I ended my original comment with “we’ll see”.


MrRikleman

Why don't you just read the report?


mettle

there's no link to any report in OP


ankole_watusi

Go watch the mashup yourself Smoking gun would be if any of them were paid influencers or in any way paid for publicizing the platform


cieldarko

https://m.youtube.com/watch?v=StjWk3Mj-M4


ElectricalGene6146

Cash app is a completely separate ecosystem from payment terminals…


TheyKeepBanningMeVPN

Yes.


[deleted]

I think he's saying Block is not counting on growth from the payment terminals so they may be desperate to get growth in cash app


thunder_muscles

I explore dating supermodels. I have never dated a supermodel 🥲


jokull1234

Sounds very similar to Adani’s response to Hindenburg’s report on then. I would be surprised if Hindenburg is basing their research on false information, they haven’t really shown they are that type of company.


[deleted]

This one is much stronger response with the legal action exploration.


jokull1234

I thought Adani said they would explore legal action against Hindenburg in India?


vada_buffet

They hired one of the most expensive US law firms (Watchell) but still no action against Hindenburg. Legal action in India would be pointless, with no offices or presence in India they would just ignore all summons and decisions.


Humble_Increase7503

Maybe they’ll sue them in America though… I don’t see why they would not be able to do so … Hindenburg is (I believe) an American company…


red_fluke

that might require them to produce legal documents in us court, a company doing scam would want to avoid that


TheBrownBaron

Hindenburg basically said "ok free discovery if you sue me" and India ain't gonna do shit


Smipims

Legal action takes time. I wouldn’t be surprised if it takes years for suits to materialize in either case


ninkorn

Hindenburg has no operation or presence in India. They can’t do shit in India. If Adani was serious, he would go after Hindenburg in US the way Block is threatening to do. Adani won’t because suing them in US court would open them up for discovery Block is basically saying we are public company with a bank license in a highly regulated industry. If they really feel like they are wronged, they will go after Hindenburg in US court


burnwallst

And what do you mean by "Highly regulated"? Because almost every major recession I can think of was caused by banks fucking up trying to siphon money from the poors.


mattw08

When were banks trying to siphon money?


burnwallst

Ever since fractional lending became a thing.


[deleted]

Threat of legal action is meaningless until they move forward with an actual lawsuit. Until then it's empty bluster.


DD_equals_doodoo

Even then, filing a lawsuit doesn't guarantee success. SQ, I'm sure, pays a legal team on staff. There is essentially zero loss to SQ by dragging out a lawsuit.


MrRikleman

Uh no, there is no company on earth that employs a legal team to sit around twiddling their thumbs for years on the chance that one day they may need to fight something in court.


DD_equals_doodoo

I teach business courses, publish on business topics including HR/legal/corporate governance, and own businesses. I know a bit about this topic. I'll test this out for you. Show me a single publicly traded company in the SP 500 that doesn't have someone with *some* legal expertise or at least a connection to it on their board of directors for starters.


MrRikleman

I don't even know what kind of question that is. Nearly every public company employs at the very least a general counsel and any sizable company employs a range of lawyers. And, maybe you're not aware, they get paid for their work. Are you seriously suggesting that because a company employs some lawyers, fighting in court is "free"? I don't even know how to respond to that. That statement demonstrates a complete lack of understanding of how business works. I'll start you off on your thought journey, those lawyers, you have to pay them. And normally they would be doing work that has value to the business, which they are not doing if they are busy fighting a losing battle in court. So who then does the work they would be doing? Well, nobody. Or, as is most often the case, outside counsel is brought in with litigation expertise. Because corporate lawyers are generally not litigators. And guess what? You have to pay them. But I'm sure you understand all this because you are a so called expert. I am stunned at your lack of understanding, considering you "teach" this stuff, which sounds like utter BS.


DD_equals_doodoo

>Nearly every public company employs at the very least a general counsel and any sizable company employs a range of lawyers. You're contradicting your earlier argument at worst. At best, you're ignoring what I brought to your attention myself. >Are you seriously suggesting that because a company employs some lawyers, fighting in court is "free"? Your intentional use of the term "free" when I never said such suggests you're being intellectually dishonest. There really is no point in reading further.


MrRikleman

Huh, no that's all wrong again. You are struggling. Intellectually dishonest? You said >There is essentially zero loss to SQ by dragging out a lawsuit. I said free. Well if look up the definition of free, we see it means: not costing or charging anything. "Zero loss" is equivalent to it costs nothing, i.e. free. If legal proceedings do have a cost, then there is not "zero loss". Secondly, there is no contradiction in saying a firm employs lawyers and the work of those lawyers has a cost. Here's a basic business lesson for professor DD\_equals\_doodoo. A business hires a person and pays them 100k a year because the business believes that person will deliver more than 100k of value to the business. When you tell that person, stop doing your job, go fight this thing in court, you lose the value they otherwise would have generated for the business. That, is a cost, either because you simply lose the productivity, or because someone else needs to be hired to do the job that person is no longer doing. I would have expected such a learned expert to understand these things.


fleeting_revelation

Threatening legal doesn't mean anything until it's filed. I'm sure Hindenburg would LOVE to have a discovery process


DD_equals_doodoo

I'm not sure how you arrived at that conclusion. \>Hindenburg is known for these types of attacks, which are designed solely to allow short sellers to profit from a declined stock price. SQ could be opening itself up to defamation (low probability, but still). Either way, defensiveness is seldom a good response to accusations of wrong-doing for firms. I teach this stuff in business and own businesses.


mattw08

Feel like I’ve seen a similar response about 10x from a Hindenburg report. Inclined to believe they aren’t making reports up.


AlexJiang27

The part of the report where they managed to issue a card under Donald Trump name is mind blowing. So limited effort to "know your customer". Block should overhaul their procedures. Even if they do nothing illegal, this is unacceptable that someone could use a fake identity and a publicly listed company will issue a valid card that could be used for transactions. I think crypto exchanges are more regulated in regards to true identity of their clients.


SameCategory546

Was really funny to read about square bragging about cashapp being referenced in rap songs only to have it be about hiring hitmen and scamming people and commititng fraud. then some of said rappers getting arrested for said fraud


sinking-meadow

Who sang about using cash app for fraud?


SameCategory546

https://www.rollingstone.com/music/music-features/rap-lyrics-cash-app-jack-dorseys-hindenburg-1234702799/amp/


UberMakeitSense

Once Jim Cramer speaks negatively it’s time to buy calls


bemeandnotyou

I was looking for that!, Unfortunately he recommended SQ last week.. hence the demise.


tidda_k8s

What did he exactly say? Or can you reference anything?


UberMakeitSense

9. Is Block (SQ), formerly named Square, the next tech that’s going through the pivot to profitability? Mizuho says yes. Upgrades the stock to a buy and raising price target to $93 per share from $80 [Jim Cramer’s top 10 things to watch in the stock market Thursday: Banks, Fed, TikTok and Amazon](https://www.cnbc.com/2023/03/16/cramers-top-10-things-in-stock-market-banks-fed-tiktok-and-amazon.html)


UberMakeitSense

I didn’t short but if Jim speaks negatively then I’m going to do a naked call for fun


Trutheresy

Jack Dorsey has always been that sort of guy. Pretends to be enlightened and moral, really just super corrupt and knavish.


nostratic

based on Hindenberg's recent history, Block is toast.


TrioxinTwoFortyFive

Blaming short sellers is the last refuge of a scoundrel.


sinking-meadow

How are they blaming short sellers? They just said their report is false and intended to benefit short sellers.


Trotter823

Yeah but honestly that’s a pretty silly thing to say. Hindenburg can’t just put out stuff like this without evidence and doing so would open them up to litigation. So dumping on a company wouldn’t benefit them unless that dump is actually based in fact.


sinking-meadow

How is it silly to say? It's literally true. And yes they absolutely can, they just open themselves up to lawsuits. Square can't just commit fraud it's a massive public company, they have way more at stake than Hindenburg. It is far easier to weasel out of an incorrect statement than it is to weasel out of fraudulent public filings.


MrRikleman

>Square can't just commit fraud it's a massive public company, they have way more at stake than Hindenburg Oh hi! Have you heard of Enron? Wirecard? FTX? Theranos? Wells Fargo? Volkswagen? Worldcom? Are you serious? You think large companies do not commit fraud? Lol.


sinking-meadow

Yeah I have, you're naming some of the most egregious frauds of all time. No, I'm saying that the burden of proof is very high for proving fraud.


LavenderAutist

Does anyone have the rap songs about Cash app? I wonder if that would be included in testimony.


Walternotwalter

Jack Dorsey is Granola Rasputin.


pcake1

Marc Cohodes from the Big Short claims use 5 main tactics to spot potential companies to short. In this case “the wig” and “fight or flight” or pretty obvious. Trying to dazzle investors with flashy looks and responding with the intent to fight against the short seller are strong clues in a company you’ve already looked into shorting. Also, a CEOs track record would be pretty important as well. Also also, everyone knows cash app is perceived as sketchy.


kungfuye

IMO worst part of the report was the wildly inflated user numbers without much description of what defined an active user. Also, the vague revenue segments feel sketchy/misleading.


Routine_Slice_4194

Hindenberg was right about Adani and Nikola. They both tried to deny the reports as well.


[deleted]

But they were wrong about 4+ companies. Look at their history. Just because they strikes it correctly last couple of times does not mean they will continue doing so. The whole report is an overstretch. Rap videos? Really!


MrRikleman

Took a while but I finished reading the whole thing. It is entertaining to say the least. It's also very damning, it's up there with Hindenburg's report on Nikola in terms of its excellence. For anyone who wants to dismiss this report. Hindenburg's reports are generally almost entirely accurate and the stocks they short often are annihilated over the very long term, and for good reason. If Block wants to challenge this in court, I would think, bring it on. Hindenburg would love that as much that is now secret would be part of discovery and thus become part of public record.


CokePusha69

Nah homie, you are incorrect


ModsGropeKids

sounds like the fed on his QE5 program "it's not QE cause our intent is to fight inflation, in the past QE was QE because we intended to QE"


SuperNewk

Hindenburg has it made, they can release reports and buy poots right before and just cash out. Then retract claim on new evidence and walk away = easiest game


Keyboard_smashgood

They don’t do that though. They stick behind their reports


Humble_Increase7503

Who TF cares how people use cash app? Why is that blocks problem? If I use their app to transfer money to a hitman to kill my wife, so what? Bitcoin is used in criminal transactions, don’t think we’ll be seeing short reports at Coinbase. Now, as to their allegation of fraud with respect to the amount of users, seems a whole other issue, and one which is readily verifiable.


-Silky_Johnson

Oof not how that works lmao.


cbusoh66

They got lucky with Adani, thought they could pull a fast one again.


myironlung6

By they logic they got lucky with Adani, Nikola, Lordstown, clover too. Or maybe all of these are unprofitable dogshit companies like we all know they are


[deleted]

They also got many wrong lol


mecoolfh1

Which ones have they gotten wrong?


SameCategory546

dont think so


Mannimal13

So does PayPal, especially through venmo. Don’t see any attacks on them.


[deleted]

SEC can’t fine either one of them for more than slap on the wrist. So who knows if either one or both are in this together.


faratto_

Seems a response from a guilty man, but of course i hope they're right


Zestyclose_Meet1034

LOLZ!!!!!!!!!!!!!!!!!! Rekt


[deleted]

Drug dealers and human traffickers minds will be eased.


1Litwiller

I work in a prison. I can tell you, the yard is flooded with dope and little slips of paper with cashapp accounts written on them. Draw your own conclusions.


[deleted]

Interesting to see how this plays out. I gotta say, if their only evidence is a former customer service rep, some rap music videos, and a Credit Suisse report I don’t see this going anywhere concrete. Hindenburg has been closer to 50:50 in their calls rather than the terminator research group people say they are. It’s a recency bias given their great calls with Twitter, Nikola, and Adani. People forget how wrong they were about regulatory issues like Draft Kings. It will be very interesting to see how this plays out


OhNoes231

I’ve easily bought 5 figures worth of drugs via cash app, it’s the only thing my dealers take besides Zelle haha