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short sellers crashed Square stock today but Kathy Wood is out here buying up every dip I'm God Blacksburg from Wolf Financial I'm here with Evan from stock market news we're going to give you the full story on this insane turn of events that happened today before we do that make sure that you are subscribing to the channel that you're watching this on like the video we're going to go ahead and hop right into things starting out hot Hindenburg research came out today and posted after a two-year investigation They concluded that square ticker symbol SQ systematically exploits the demographic that it claims to help they said this along with a number of other crazy claims that they came out with today one of the wildest parts of this report was a full video that they put together showing all the clips of gangsters Mafia and thugs on YouTube saying that they use square and cash app specifically to pay people for drugs hits and or they actually showed that there was a video which you can see right here in the bottom right where a mobster said I paid them hitters through cash app and then this man was later charged with attempted murder and that video was sponsored by cash app who did a giveaway so this story is crazy let's get into the thick of things before I go to the next slide stock market news do you have anything you want to throw in here thank you hello no I think this video has been fantastic so much so far I'm excited to uh keep hearing the breakdown I have a couple more stuff I'll talk on after this stuff uh I I'm shocked at how much the stock moved but I would love to hear more about the breakdown about why so this stock it was I mean we'll show the move soon it was a big move uh this is a little bit of a breakdown of what happened here they raise concerns basically about the banking strategy cash app and Jack Dorsey those are their three problems that they have with the company Square also known as block now after they rebranded they stated that their entry into banking faces regulatory skepticism posing financial and reputational risks they also if you look back at slide one they claimed that they had misled investors basically showing uh faulty numbers they also stated that cash app again has been used for many fraudulent activities including illegal gambling scams and more they stated that they are inadequately addressing those issues they stated that their rapid growth is probably unsustainable due to increasing competition regulatory regulatory scrutiny um they have raised issues around dorsey's dual role as the CEO and his Effectiveness they stated that he's taking advantage of people I mean there is a lot of claims as you can see throughout here uh the validity of their claims really remains to be seen we're going to go through a little bit of that but the one thing I want to focus on here is somebody always knows it's coming you can see this because we can go ahead and we can look on the option chain so this short report was published today today is March 23rd on March 21st two days ago at 11 49 a.m Eastern a Trader opened a new position the largest in the last seven days for square they were Square 74 puts they exited half of that trade this morning they turned 500 000 into 5 million dollars it's in a thousand percent gain that does not happen by accident could this have been Hindenburg themselves very possible the CEO of Hindenburg is actually a billionaire now because he's made so much money off of these hits that he's put out on stocks on the right side what I'm just showing here is actually basically just showing that there was no volume on the chain yesterday meaning that the trader entered the day before stayed through it yesterday and then sold today so they didn't exit at all yesterday I just thought this was fascinating but we can keep rolling with the story so let me turn it over you stock market news no I think there's a couple more discussions on that one right there um I think the fact that it is not a good thing that people can go on and really kind of talk their book with zero disclosure so I don't think this is a good thing at all but it's definitely not exclusively a short seller thing as well I feel like a lot of people kind of have hatreds towards short sellers but so many CNBC guys or or whatever repeat the people that they have on come on there um really do kind of talk up their book and we don't know what they're holding they only have to update it on 13fs so that's uh something interesting to watch how do you feel about that one yeah no I'm in the same boat as you but to be honest it's really hard right because uh people are talking about these things every single day how should they go about disclaiming them where should they put those disclaimers should they disclaim position sizing I think that this is something that the US really has to address there's very little uh regulation around it and scrutiny we know that ourselves because we're on Twitter spaces all they talking about things and we do our best as well to give disclaimers and obviously our position sizing is not necessarily typically a half million dollars going into a trade that's somebody who has a lot of confidence right and they're trading off an assured knowledge that there is going to be a profit there they didn't just put that down by accident so it's a little bit different in this case when they know that something's coming but you know you we've seen insider trading of all types specifically in the government all the time in the government in fact and it's still coming out now we just found out I mean I'm sure that you saw this one of the Democratic senators uh the week before all the banking stuff went down so old a massive portion millions of dollars of banking stocks from their portfolio right and then all this stuff went down and everyone pays attention to the Silicon Valley Bank officials who distributed bonuses and other pieces but nobody looks at the government who saw some of this coming as well and did some sales so there's a lot of fingers to point um but I agree with you I think the short sellers they get more hate than others just because you know they're short selling right they want they want people to lose their jobs uh the other people are trying to boost uh boosting so yes they do get more hate than others yeah so it was also very interesting to see their response Square came out uh I wonder what the best response here is um this was definitely an interesting one they did come out and basically say that we intend to work with the SEC and explore legal action against hindenburger research for the factually inaccurate and misleading report they shared so I think that's the first reaction a lot of people have uh when this stuff does go down to kind of say we're going to sue but we'll see how much does come out of that what do you think of that reaction um yeah do you think it was the best course yeah you have to put a statement out there right and even if you're not going to do anything what you can see here is that they say they intend to work with SEC and explore legal action they do not come out and say we are suing right this is just a statement this is just a statement of them coming out and putting me out in the air saying this is wrong they're an attacker they're in the wrong we're going to do something about this they don't actually have to do anything about it at this point if you notice Hindenburg has been mistaken in the past they've had several mistakes right where it was ultimately debunked as not credible research and many of those stocks return to previous levels right or other things happened and honestly in today's world uh the move seems you know large but not crazy exaggerated from what we've seen so I have a feeling that um Square does not want to open up the can of worms here my opinion is that they will likely uh maybe send one letter to to Hindenburg Hindenburg everybody has put this out there they've already made their money I think they're moving past it at this point to be quite honest so I believe that this does die down like most of the Hindenburg reports honestly do the only other thing I want to point out here is just how short this report is this reply from square is I don't know if this is just like hey let's get this thing out right now maybe we get something out tomorrow or maybe we get the whole weekend to react and a real kind of reply on Monday but I know I did not cut it off there's only like an about Square section below this that's yeah the reply there um but yeah I I think another thing that really did surprise me and we kind of mentioned a little bit earlier was how much Hindenburg was able to move Square stock Square was about a 45 billion dollar market cap company it was down I want to say about seven billion dollars six billion dollars something like that but Jack dorsey's net worth was down 526 million dollars uh just in one day that's uh that's a lot of money to be down but I think that that's crazy and I think it's equally as crazy looking at that stock chart right there how much uh Hindenburg research they can move the stock right now I think that after that uh a Donnie group one uh that has them in pretty high regards right now yeah last time they shorted all of India right and so now this is happening at a dining group well I mean that ended up being a very serious one and a significantly cost with tomodani right in his pot I think I mean in like top three richest people in the world um so we'll see how this one does plan out but yeah like you said I think at one point it was down like 20 at the low of day um pretty sizable move for a stock of this size which is still uh doing pretty good I mean I'll take a look at this real quick and then we can go into the other piece that I know we wanted to hit on but if you take a look at you know Square just from a objective perspective right I'm just saying you know compare it against the sector median and number of cases and stuff like that um the company you know they've got good growth good momentum I'd suppose the profitability is not the best but it's not a company that you would look at and go all right you know they deserve a 20 haircut necessarily in my opinion I think trading now around 61 especially but I always saw the 70 to 75 as the fair value for the stock having run a DCF model on it so I just think it's interesting where it's at now but I know we want to get into a big topic here is square was Fallen today but people were buying and one of those people specifically was Kathy Wood who was actually as you can see here not only buying square but selling Tesla to do it Evan tell me about what she what she's doing here what's what's she thinking yeah so uh Kathy is clearly showing her confidence in square she did buy a tiny bit more Square in a different one of the smaller portfolios on the bottom but this is the meat of the move she went ahead and sold Tesla so that I could kind of tell you how the exposure is it was getting to a large position in that portfolio so this was kind of getting close to inevitable but um this was a decisive move sold Tesla to buy a lot of square sold 200 uh bought 275.5 000 shares in the main Arc K ETF and she also bought some coinbase today which was down for a different reason we'll talk in a second but Kathy Wood is really kind of selling her quartet slip position and taking up a complete opposite against Hindenburg research so uh a little bit of a fight maybe uh we try to get them on a Twitter spaces I think that would be a fantastic conversation so maybe we need to start pitching that a little bit but uh but yeah that's definitely the thing do you have any thoughts on kind of Kathy would uh taking the opposite side of hindemick research on this one I currently have a Tesla call in place uh there's been a history of stocks ripping after Kathy sells so I am looking forward to seeing what happens with Tesla tomorrow that's all I will say on the Kathy stuff uh one thing I will say though as you were pointing out there is she was also buying coinbase which had a massive down date today and yesterday in fact coin right now uh let's just see because we're not going to have I believe the stock chart on there coin at the moment finished today down 14 at one point they were down 20.65 percent they are now down five and a half percent on the week after having an incredible incredible week with the rest of crypto so just taking a look at this they did get that Wells notice you want to cover that yeah so uh this was pretty interesting you can kind of see it there just means that the staff um have said that a preliminary determination to recommend that the SEC file an enforcement action against the company so it's not saying that we have or are going to but maybe uh maybe we should is how I would classify it coinbase did come out today and really kind of come um out of spaces and was more or less trying to gather the troops tell all the crypto people that they should help help fight against this and that they shouldn't come out with uh you know just threats and they should work together so we'll see on this one this is an interesting development but it did send coinbase stock uh crashing pretty pretty hard today as you did say so it's an interesting uh wash there yeah absolutely dropped but Kathy was buying so let's see if others do come in like you said Brian Armstrong It's been on Spaces coinbase it's difficult to say exactly what's going to happen here but again they are a regulated U.S company so they are not in a similar position to some of the other crypto exchanges which we have seen fail um could they sustain a run on the banks who knows to be decided that is going to do it for today's video though thank you to everybody that made it to the end of the video one more time please remember to go ahead and subscribe to the channel that you are watching this on and to like the video as well we do these complete for free we're trying to bring breaking news to the masses as fast as possible especially things which could affect your portfolio Evan is there anything else you want to share on this one nope appreciate that if you enjoy the video make sure you like drop a comment and subscribe perfect
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