Author: Carolina Mandl
NEW YORK (Reuters) – The founder of Hindenburg Research said he would dissolve the company whose reports sparked a sell-off by investors and a government probe, wiping billions from the market value of companies including India’s Adani Group and U.S. Nikola (NASDAQ: ) .
Nathan Anderson, who launched the Hindenburg in 2017, cited the toll of the “quite intensive and sometimes all-consuming” nature of the work as the reason for his decision, in a website post published on Wednesday.
Short sellers like Anderson, who managed his company’s own money but not the money of others, bet against companies they believe have accounting problems, mismanagement or fraud, usually discovered after a long period of investigation.
Short selling involves borrowing stocks to sell them in the expectation that the price will fall, then buying the stock again and pocketing the difference. If the price rises, the seller may be exposed to potentially unlimited losses.
Anderson, who did not immediately respond to a Reuters request for comment, said there was no specific reason for his decision – “no particular threat, no health issue, no major personal issue.”
“The plan was to finish after we were done with a bunch of ideas we were working on,” he said. – That day is today.
In 2023, another well-known short-seller decided to close his company. Jim Chanos, best known for his bets against energy trader Enron many months before the company’s December 2001 bankruptcy amid an accounting scandal, has shut down his hedge fund, saying its business model was under pressure.
‘SHAKING EMPIRE’
The Hindenburg is named after the high-profile crash of the German airship Hindenburg in 1937, which caught fire while flying to New Jersey.
After discovering the potential abuse, Hindenburg released a public report explaining the case and bet against the targeted company, hoping to make a profit. Other investors would often make their own trades based on Hindenburg’s research.
On his website, Hindenburg said he looked for “man-made disasters,” such as accounting irregularities, mismanagement and undisclosed related-party transactions.
One of Hindenburg’s reports was a bet against Indian conglomerate Adani Group in 2023 that saw more than $100 billion in value wiped from the group’s shares.
The short-seller has accused Adani Group of improperly using offshore tax havens, which the company has denied.
US prosecutors announced in November that Gautam Adani, the billionaire chairman of the Adani Group and one of the world’s richest men, was indicted in New York for his role in an alleged multibillion-dollar bribery and fraud scheme.
Hindenburg also went after electric truck maker Nikola in 2020, in one of his most famous short films.
The short seller said that Nikola deceived investors about his technological development. Anderson disputed a video made by Nikola showing his electric truck circling at high speed, while the vehicle was actually rolling down a hill.
A US jury convicted Nikola’s founder Trevor Milton of fraud in 2022 over allegations he lied to investors.
In 2023, the company shorted Carl Icahn Icahn companies (NASDAQ:) and Block led by Jack Dorsey.
“We shook some empires that we felt needed to be shaken,” Anderson wrote, adding that regulators had indicted nearly 100 people “at least in part” for Hindenburg’s work.
Anderson, a University of Connecticut graduate who began his career in finance at a data firm, said in his post that the intensity and focus of his work has taken its toll and that he misses “a lot of the rest of the world and the people I care about.”
“I now look at the Hindenburg as a chapter in my life, not as the central thing that defines me,” Anderson wrote.
“So over the next 6 months I plan to work on a series of materials and videos to open up every aspect of our model and how we conduct investigations,” he said of his future plans.
