Jack Dorsey, the co-founder of Block Inc., has suffered a significant drop in his net worth following the release of a report by Hindenburg Research alleging that the payments company had ignored widespread fraud, Bloomberg reported.
According to the Bloomberg Billionaires Index, Dorsey's fortune decreased by $526 million on Thursday, resulting in his worst single-day decline since May.
With an 11% drop, Dorsey's net worth now stands at $4.4 billion. Hindenburg's report accused Block of inflating user metrics and claimed that the stock had a downside of 65% to 75% "on a purely fundamental basis." Block denied the allegations and plans to take legal action against the short-seller.
On Thursday, Block's stock fell by as much as 22%, eventually closing down 15%. Most of Dorsey's personal fortune is tied up in Block, with his stake in the firm estimated to be worth $3 billion by the Bloomberg wealth index. In addition, his position in Elon Musk's social media company, Twitter, is valued at $388 million.
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This is not the first time that Hindenburg Research, led by Nathan Anderson, has targeted billionaires and caused their fortunes to decline. The firm's investigation into Gautam Adani and his empire earlier this year caused his company's stocks to plummet and erased tens of billions of dollars from his net worth. Adani, who was once the world's second-richest person, now ranks 21st on Bloomberg's wealth index with a $60.1 billion fortune.
In addition, Hindenburg targeted electric carmaker Nikola Corp. in September 2020, leading to a significant drop in its stock price and a fraud conviction against its founder, Trevor Milton, in October.