US short seller firm Hindenburg Research has dropped a bombshell report against Jack Dorsey-led payments firm Block Inc and the firm's Indian-American CFO Amrita Ahuja has come under the scanner for allegedly dumping the firm's shares.
On Thursday, Hindenburg has accused co-founders Jack Dorsey and James McKelvey along with executives, including Chief Financial Officer Amrita Ahuja, and the lead manager for Cash App, Brian Grassadonia, of "dumping millions of dollars in stock."
“As Block’s stock soared on the back of its facilitation of fraud, co-founders Jack Dorsey and James McKelvey collectively sold over $1 billion of stock during the pandemic. Other executives, including CFO Amrita Ahuja and the lead manager for Cash App Brian Grassadonia, also dumped millions of dollars in stock,” the report stated.
Who is Amrita Ahuja?
Ahuja is an Indian-American executive who rose the ranks to become the company’s CFO in February this year. Here’s all you need to know about her.
Ahuja is an alumnus of premium universities such as London School of Economics, Duke University and Harvard Business School.
Before joining Block in 2019, she worked with business behemoths such as Airbnb, McKinsey & Company, The Walt Disney Company, among others.
She started her journey as an investment banker with consulting firm Morgan Stanley in 2001.
According to a report by The Wall Street Journal, Ahuja is the daughter of Indian immigrants who owned a day-care center in a suburb of Cleveland.
While working at Fox, she played a role in launching the streaming service Hulu. In addition, at Activision Blizzard which is the maker of games such as “Call of Duty,” “Candy Crush” and “World of Warcraft,” she helped transition the video gaming company’s business model from one dominated by in-store sales around the holidays to one defined by an online, always-on, multiplayer experience.
She was featured in Fortune’s Most Powerful Women Summit in 2022.
Also Read: Hindenburg Research shorts Jack Dorsey's payments firm Block
The US short seller’s report comes two months after its explosive allegations against Adani Group wiped more than $100 billion off the conglomerate’s market value.
And now, Block seems to be its latest target.
“Our 2-year investigation has concluded that Block has systematically taken advantage of the demographics it claims to be helping,” Hindenburg said about the report.
Besides, Hindenburg has also accused the Block management of distorting customer acquisition costs. The report quoted Ahuja who said, “We saw as a customer acquisition cost across those areas of $5 in ‘20 – of less than $5 in 2020. And that’s against the backdrop of our network growing by 50% year-over-year to 36 million monthly actives. That less than $5 is much smaller than what a traditional financial institution would pay.”
Hindenburg countered these claims in its report.
"Ahuja explained that Cash App achieves this low cost due to network effects, because “a customer can bring a new customer into Cash App at little to no cost for us” by inviting them to engage in a Cash App transaction," the report said and added, "We strongly suspect Block’s reported cost of acquiring each new “transacting active” account is misleadingly low because single individuals may set up dozens or hundreds of accounts, including fake or scam accounts."
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