NEW YORK, Jan 25 (Reuters) – Short-seller Hindenburg Research disclosed on Wednesday brief positions in India’s Adani Group, citing potential inventory manipulation and accounting fraud in a report. The allegations despatched bonds and shares in the conglomerate’s corporations down.
Hindenburg has a track-record of discovering company wrongdoings and putting bets in opposition to the corporations.
WHAT IS HINDENBURG RESEARCH
Founded in 2017 by Nathan Anderson, Hindenburg Research is a forensic monetary analysis agency which analyses fairness, credit score and derivatives. On its web site, Hindenburg says it seems to be for “man-made disasters,” reminiscent of accounting irregularities, mismanagement and undisclosed related-party transactions. The company invests its personal capital.
It was named after the excessive profile catastrophe of the Hindenburg airship in 1937 which ignited because it flew into New Jersey. After discovering potential wrongdoings, Hindenburg normally publishes a report explaining the case and bets in opposition to the goal company, hoping to make a revenue.
WHO IS HINDENBURG’S FOUNDER?
Nathan Anderson, who graduated from the University of Connecticut with a level in worldwide enterprise, began his profession in finance at information company FactSet Research Systems Inc, the place he labored with funding administration corporations.
“I spotted they have been doing a number of run-of-the-mill evaluation, there was a number of conformity,” he advised the Wall Street Journal (WSJ) in 2020. He additionally did a quick earlier stint as an ambulance driver in Israel. The short-seller says on his LinkedIn web page that it gave him “expertise pondering and performing beneath excessive stress.” Anderson has stated in interviews that Harry Markpolos, an analyst who first flagged Bernie Madoff’s fraud scheme, is his function mannequin.
WHAT IS HINDENBURG’S MOST HIGH-PROFILE BET?
Hindenburg is finest recognized for its guess in opposition to electrical truck maker Nikola Corp (NKLA.O) in September 2020, which generated “an enormous win,” he advised the WSJ, declining to specify the quantity.
The short-seller stated Nikola deceived buyers about its technological developments. Anderson challenged a video Nikola produced displaying its electrical truck cruising at excessive pace – in reality the automobile was rolled down a hill.
A U.S. jury convicted Nikola’s founder Trevor Milton, Nikola’s founder final yr of fraud over allegations he lied to buyers. The company agreed in 2021 to pay $125 million to settle with the U.S. Securities and Exchange Commission over its representations to buyers. Nikola debuted as a listed company in June 2020 and its valuation reached $34 billion some days after, surpassing Ford Motor (F.N). Now, it is value $1.34 billion. Hindenburg says whistleblowers and former workers helped it with findings.
HOW MANY COMPANIES HAS HINDENBURG TARGETED
Hindenburg has flagged potential wrongdoing in not less than 16 corporations since 2017, based on its web site. Last yr, it took a brief after which a protracted place in Twitter Inc. In May, Hindenburg stated it was brief as a result of it believed that Elon Musk’s $44-billion provide to take the company personal might get repriced decrease if the world’s richest particular person walked away from the deal. In July, Anderson disclosed a “vital lengthy place,” betting in opposition to Musk. The deal for Twitter closed in October at the authentic worth.
Reporting by Carolina Mandl in New York; Editing by Megan Davies and Josie Kao
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