Hindustan Research holds short positions in payment firm Block

On Thursday, Reuters- Hindenburg Research held short positions in Block Inc, alleging that the Jack Dorsey-led payments firm overstated its user counts and understated its customer acquisition costs.

The short seller said in a note published on its website that Block has taken advantage of the demographics it claims to be helping.

After the report, Block's shares fell 18% in premarket trading.

In its latest report, the U.S. short-seller, behind the market rout of over $100 billion in India's Adani Group, said former Block employees estimated that 40% -- 75% of accounts they reviewed were fake, involved in fraud or were related to other accounts tied to a single individual.

The claims raised by Hindenburg against Block could not be verified by Reuters.

As of March 22, about 5.2% of Block's free float shares were in short position, according to Ortex data.

Hindenburg Research was founded in 2017 by Nathan Anderson and is a forensic financial research firm that analyzes equity, credit and derivatives. It has a track-record of finding corporate wrongdoings and placing bets against the companies.