Block gave a 'robust' response to brutal short-seller report, and shares of the CashApp parent are looking at 40% upside, Bank of America says
holds the potential to push 40% higher from recent levels, buoyed in part by the company's"robust" response to a short-seller's claim about fraudulent accounts on its Cash App platform, said Bank of America.
The stock rose 2% during Friday's session, building on its 3% advance on Thursday. Block on Thursday issued a detailed response to Hindenburg Research's March 24 report on the company led by Jack Dorsey. raised concerns about Block's reporting on monthly active accounts on Cash App and related compliance processes.
"These 44 million accounts are represented by 39 million unique Social Security numbers, as some individuals hold multiple accounts ," BofA equity analyst Jason Kupferberg wrote."These metrics suggest that the short report's allegation that 40-75% of Cash App accounts are fake/fraudulent/duplicative is not credible." that Block's response"confirmed it has reported inflated user counts to investors for years.
Meanwhile, the investment bank also said it's"bullish" on Block's dual-sided business that consists of Cash App and Square, the platform used by small and mid-sized business to accept credit card payments.
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