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‘We shook a lot of empires,’ says Nate Anderson as he disbands Hindenburg Research
Nate Anderson, the man behind Hindenberg Research, the short seller hedge fund that was responsible for the rout in Adani group stocks in January 2023 when it accused the group of irregularities, has decided to disband his company.
In a note Anderson said, “As I’ve shared with family, friends, and our team since late last year, I have made the decision to disband Hindenburg Research. The plan has been to wind up after we finished the pipeline of ideas we were working on.” He added that since investigations into the last Ponzi cases were completed and shared with regulators, “that day is today.”
Hindenburg Research’s modus operandi was to dive deep into companies or groups identified by it, investigating them for corporate fraud, accounting jugglery, corporate governance lapses and release their findings via its website. When the shares of such companies tanked, it would purchase them having previously taken short positions in them.
The outfit’s first and most high profile target in India was the Adani group, the allegations wiping out over $130 billion in market capitalisation. It also spurred investigations by Securities and Exchange Board of India as well as a Supreme Court-mandated probe, both of which remained inconclusive, virtually giving a clean chit to the group.
Companies that were a target of its investigations included Super Micro Computer, Nikola, Cover Health, Lordstown Motors, and Clover Health.
In the case of Nikola, Hindenburg Research accused the founder Trevor Milton of perpetrating an intricate fraud built on dozens of lies. Its stock plunged 40 per cent and the US Securities and Exchange Commission opened an inquiry, that found Milton guilty of wire and securities fraud.
It also went after Icahn Enterprises, alleging that its dividend structure functioned like a Ponzi scheme. Its shares fell over 50 per cent after the disclosures.
Writing about his journey and work, Anderson said, “It has also been rather intense, and at times, all-encompassing. I often wake up from my dreams because I’ve thought of a new investigative thread to pull on in my sleep, or an edit that clarifies a point I didn’t realize I was troubled by during the day.” “We shook some empires that we felt needed shaking,” he said.
His decision to disband was not due to any one specific thing – “no particular threat, no health issue, and no big personal issue,” – but a feeling that the intensity and focus had come at the cost of missing a lot of the world and the “people I care about.”
Adani group CFO, Jugeshinder Robbie Singh, posted a cryptic comment on microblogging site X, “Kitne Ghazi Aaye, Kitne Ghazi Gaye”.
Private investor and markets commentator Ajay Bagga in a long post on X enumerated several reasons for the closure of Hindenburg Research including that it operated in a grey zone and that some regulatory action may have taken place and shutting down would be a way to skip penalties. “Damage has been done to companies, promoters and markets by targeted attacks from which they sought to benefit,” he said, adding that it was not an altruistic, truth seeking endeavour.
“Wont be missed. Dismissed,” the post ended.
There were others who lauded Anderson’s efforts. Public interest lawyer and activist Prashant Bhushan write on X, “They did outstandingly detailed and meticulous research on many companies involved in criminal manipulation. Many were prosecuted and jailed due to Hindenburg’s exposes done at great risk and cost. Our salute.”
Political analyst Tehseen Poonawalla tweeted that though he was an absolute supporter of the free market economy, “but nothing makes me happier to read about the closing down of the Hindenburg Research.” He also said that the group was not a crusader “but they used the free market to destroy lives and profits.”
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