The Twitter co-founder Jack Dorsey has had a rough week—although it’s been unrelated to the embattled social-media platform.
Thanks to a damning report about widespread fraud at his company Block—which includes the credit-card-payment company Square and Cash App, among other entities—Dorsey lost $526 million on Thursday, Bloomberg reported. The 11 percent drop in his wealth is the most he’s lost in a single day since May, leaving him with $4.4 billion.
Most of Dorsey’s personal wealth is related to Block, Bloomberg noted. His stake in the company is worth about $3 billion, while he gets just $388 million from Twitter, which is now owned by Elon Musk (and which is facing multiple problems of its own).
The massive drop in Dorsey’s net worth came after Hindenburg Research released a report detailing fraud at Block that helped Dorsey and his co-founder acquire billions of dollars. Among other findings, Hindenburg said that Block had inflated user counts and engaged in predatory practices that allowed it to avoid regulation and mislead investors. Block denied the allegations and said in a statement, “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.” The report led Block stock to fall as much as 22 percent on Thursday, ending the day down 15 percent.
According to Bloomberg, this isn’t the first time a Hindenburg report has led to billionaires losing large chunks of their immense fortunes. Earlier this year, an investigation into the Indian industrialist Gautam Adani resulted in him losing tens of billions of dollars. Once the second-richest person in the world, he now sits at No. 21 on Bloomberg’s wealth ranking, with $60.1 billion. And in September 2020, the research firm targeted the EV company Nikola, leading to a fraud conviction against its founder, Trevor Milton, this past October.
Now Hindenburg seems to be creating a massive headache for Dorsey, and the firm’s report suggested that other investigations into Block’s practices are ongoing. As of Friday afternoon, Dorsey’s net worth had fallen even further, to just $4.1 billion, according to Forbes. At least that’s a few hundred million less than Thursday’s downward spiral.