Block slides 20% after short-seller Hindenburg says 2-year investigation indicates the company has 'wildly overstated' genuine user counts

• Block shares drop 20% on Thursday after Hindenburg Research said it's shorting the payments company. 
• The famed short-seller said an investigation indicated the company used inflated metrics.
• Hindenburg alleged Block "obfuscates" how many individuals are on its Cash App platform. 

Block plunged Thursday after Hindenburg Research said it's shorting shares in the payments company, alleging it has mislead investors with inflated metrics.

Block, whose CEO is Jack Dorsey, didn't immediately reply to Insider's request for comment about the short-seller's allegations. 

Block shares dropped 19.5% to $58.51 as trading in Thursday's regular session got underway. 

Hindenburg said its two-year investigation into Block found the company "obfuscates" how many individuals are on its Cash App platform by reporting misleading "transacting active" metrics that are filled with fake and duplicate accounts. 

It alleged Block has "wildly overstated its genuine user counts and has understated its customer acquisition costs," and that former employees estimated that 40%-75% of accounts they reviewed were "fake, involved in fraud, or were additional accounts tied to a single individual."  

"Block can and should clarify to investors an estimate on how many unique people actually use Cash App," said Hindenburg, whose report in January targeted Indian conglomerate Adani Group.