STORY: Shares of Jack Dorsey’s payments firm Block plummeted on Thursday amid accusations the company fudged its user numbers and customer acquisition costs.

A report from short-seller Hindenburg Research alleges that former Block employees estimated that 40 to 75% of accounts they reviewed were fake, involved in fraud, or were additional accounts tied to a single individual.

Reuters could not independently verify the claims and Block did not immediately respond to a Reuters request for comment.

Hindenburg is the same short-seller behind the recent $100 billion market rout of India's Adani Group.

It also on Thursday disclosed its short position in Block.

The move is seen as a challenge to Dorsey, who, before Block, co-founded Twitter - which made him one of the most famous faces in Silicon Valley… and, a billionaire.

Dorsey co-founded Block in 2009 with the goal of shaking up the credit card industry, and is the company's largest shareholder with a stake of around 8%.

The report comes at a time when the outlook for the payments industry has been clouded by worries over the strength of consumer spending in the face stubbornly high inflation and expectations of an economic downturn.

Shares of Block were down more than 10% Thursday in midday trading.