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Hindenburg Research issued a short report that sent shares of Block Inc SQ down on Thursday. Analysts are sharing their reactions and takes on the allegations from the short seller.

The Block Analysts: Bernstein analyst Harshita Rawat has an Outperform rating and a price target of $90.

Morgan Stanley analyst James Faucette has an Equal Weight rating and a price target of $72.

KBW analyst Steven Kwok has an Outperform rating and a price target of $90.

Oppenheimer analyst Dominick Gabriele has a Perform rating and no price target.

KeyBanc analyst Josh Beck has an Overweight rating and a price target of $100.

Related Link: Jack Dorsey's Wealth Erodes By $526M After Hindenburg Report

The Analyst Reactions: Hindenburg makes claims in the short report that Block overstated user counts, illicit activity was prolific on Cash App, and there were compliance issues.

The most serious allegations, in our view, were around Blocks intentionally lax compliance policies around illicit activities & fraud on its platform and the estimates that 40% to 75% of accounts could be fake, duplicate or fraudulent, Rawat said.

The analyst said the allegations are hard to prove or disprove and more work is needed to dive into the claims.

The key issue we will assess is whether Blocks policies are/were significantly different vs. peers.

The analyst said that they are less concerned about fake and duplicate users, something not uncommon in the sector, noting PayPal Holdings PYPL as an example.

The two big questions for Faucette are how widespread is the alleged fraudulent issue with Cash App and does the current general banking environment lead to a faster regulatory review/interruption of business that would likely have eventually happened anyway.

The analyst said one big question could also be how big the impact to revenue is if any issues with Cash App need to be resolved.

Weve previously discussed how Cash App seems to have lower verification requirements that potentially may not meet all standards of Know Your Client and Anti-Money Laundering rules, Faucette said.

The analyst said investors in Block should be prepared for lower growth and monetization for Cash App.

Kwok said the biggest issue from the short report is if Cash App user metrics are overstated and if Block is enabling criminal and fraudulent activity.

While some of the things in the report seem to be taken out of proportion, the key question is whether the company is making revenues/profits on fraudulent accounts and how robust its compliance practices are, Kwok said.

Gabriele said the claims that Block is a fraudulent business are likely incredibly low, but it is hard to prove or disprove the allegations.

Putting fraud aside, parts of the Hindenburg report actually echo our downgrade note in particular, growth longevity in Cash App and EBITDA valuation vs. peers, Gabriele said.

The analyst downgraded shares to Perform in January and remains on the sidelines for the stock.

Beck said the user metrics used by Block and Cash App are consistent with peers and third-party data sources.

We see no merit to the disparaging claims and rather view the report as observations from a relatively novice industry outsider who is not familiar with standard operating practices and principles within the FinTech industry or the broader regulatory construct, Beck said.

Block Inc issued its own response to the allegations from Hindenburg on Thursday.

SQ Price Action: Block shares are down 3% to $59.85 on Friday.

Read Next: Cathie Wood Shrugs Off Hindenburg Attack On Jack Dorsey's Block With $21M Stock Buy

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UK restores diplomatic ties with Syria

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UK restores diplomatic ties with Syria

The UK has re-established diplomatic ties with Syria, David Lammy has said, as he made the first visit to the country by a British minister for 14 years.

The foreign secretary visited Damascus and met with interim president Ahmed al Sharaa, also the leader of the rebel group Hayat Tahrir al-Sham (HTS), and foreign minister Asaad al Shaibani.

It marks the latest diplomatic move since Bashar al Assad’s regime was toppled by rebel groups led by HTS in December.

In a statement, Mr Lammy said a “stable Syria is in the UK’s interests” and added: “I’ve seen first-hand the remarkable progress Syrians have made in rebuilding their lives and their country.

“After over a decade of conflict, there is renewed hope for the Syrian people.

“The UK is re-establishing diplomatic relations because it is in our interests to support the new government to deliver their commitment to build a stable, more secure and prosperous future for all Syrians.”

Foreign Secretary David Lammy shakes hands with Syrian interim president Ahmed al-Sharaa in Damascus. Pic: X / @DavidLammy
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Foreign Secretary David Lammy with Syria’s interim president Ahmed al Sharaa in Damascus. Pic: X / @DavidLammy

The Foreign, Commonwealth and Development Office has also announced a £94.5m support package for urgent humanitarian aid and to support the country’s long-term recovery, after a number of British sanctions against the country were lifted in April.

While HTS is still classified as a proscribed terror group, Sir Keir Starmer said last year that it could be removed from the list.

The Syrian president’s office also said on Saturday that the president and Mr Lammy discussed co-operation, as well as the latest developments in the Middle East.

Read more:
Wildfires break out in Greece, Turkey and Syria
Putin ‘mocking Trump’s peace efforts’, Poland says
Hamas gives ‘positive’ response to ceasefire proposal

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Since Assad fled Syria in December, a transitional government headed by Mr al Sharaa was announced in March and a number of western countries have restored ties.

In May, US President Donald Trump said the United States would lift long-standing sanctions on Syria and normalise relations during a speech at the US-Saudi investment conference.

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From May: Trump says US will end sanctions for Syria

He said he wanted to give the country “a chance at peace” and added: “There is a new government that will hopefully succeed.

“I say good luck, Syria. Show us something special.”

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Defiance in Tehran as Khamenei makes appearance

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Defiance in Tehran as Khamenei makes appearance

They rose to their feet in ecstatic surprise, shouting “heydar, heydar” – a Shia victory chant.

This was the first public appearance of their supreme leader since Israel began attacking their country.

He emerged during evening prayers in his private compound. He said nothing but looked stern and resolute as he waved to the crowd.

He has spent the last weeks sequestered in a bunker, it is assumed, for his safety following numerous death threats from Israel and the US.

His re-emergence suggests a return to normality and a sense of defiance that we have witnessed here on the streets of Tehran too.

Earlier, we had filmed as men in black marched through the streets of the capital to the sound of mournful chants and the slow beat of drums, whipping their backs with metal flails.

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Defiance on streets of Tehran

This weekend they mark the Shia festival of Ashura as they have for 14 centuries. But this year has poignant significance for Iranians far more than most.

The devout remember the betrayal and death of Imam Hussein as if it happened yesterday. We filmed men and women weeping as they worshipped at the Imamzadeh Saleh Shrine in northern Tehran.

The armies of the Caliph Yazid killed the grandson of the Prophet Muhammad in the seventh-century Battle of Karbala.

Shiite Muslims mark the anniversary every year and reflect on the virtue it celebrates, of resistance against oppression and injustice.

But more so than ever in the wake of Israel and America’s attacks on their country.

The story is one of prevailing over adversity and deception. A sense of betrayal is keenly felt here among people and officials.

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Many Iranians believe they were lured into pursuing diplomacy as part of a ruse by the US.

Iran believed it was making diplomatic progress in talks with America it hoped could lead to a deal. Then Israel launched its attacks and, instead of condemning them, the US joined in.

Death to Israel chants resounded outside the mosque in skies which were filled for 12 days with the sounds of Israeli jets. There is a renewed sense of defiance here.

One man told us: “The lesson to be learned from Hussein is not to give in to oppression even if it is the most powerful force in the world.”

A woman was dismissive about the US president. “I don’t think about Trump, nobody likes him. He always wants to attack too many countries.”

Pictures on billboards nearby draw a line between Imam Hussein’s story and current events. The seventh-century imam on horseback alongside images of modern missiles and drones from the present day.

Other huge signs remember the dead. Iran says almost 1,000 people were killed in the strikes, many of them women and children.

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Officially Iran is projecting defiance but not closing the door to diplomacy.

Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again.

“We are very strong in defence and as state officials have announced, this time Israel will receive an even stronger response compared to previous times,” she said.

“We hope that Israel will not make such a mistake.”

But there is also a hint of conciliation: Senior Iranian officials have told Sky News that back-channel efforts are under way to explore new talks with the US.

Israel had hoped its attacks could topple the Iranian leadership. That proved unfounded, the government is in control here.

For many Iranians, it seems quite the opposite happened – the 12-day war has brought them closer together.

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Politics

Secret Service seizes $400M in crypto, cold wallet among world’s largest

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Secret Service seizes 0M in crypto, cold wallet among world’s largest

Secret Service seizes 0M in crypto, cold wallet among world’s largest

Secret Service quietly amasses one of the world’s largest crypto cold wallets with $400 million seized, exposing scams through blockchain sleuthing and VPN missteps.

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