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Why did Hindenburg Research close? Short-seller that rattled Adani group disbands firm
Hindenburg Research, storied for its short-selling reports, is winding up its business. The firm, which gained traction for rattling the Adani Group in 2023, was pursuing probes against some of the biggest corporate moguls worldwide.
Hindenburg Research founder Nate Anderson on Wednesday announced disbanding his US investment research firm. The company rattled the Adani Group in 2023 after publishing a report accusing it of “pulling the largest con in corporate history”.
The announcement came as a surprise, as the short-seller was pursuing probes against some of the biggest corporate moguls worldwide. Then what went wrong? Was it a threat from someone? A health issue? Or another personal issue?
Hindenburg shutdown: Why disband now?
Nate Anderson started Hindenburg in 2017. The Hindenburg boss cited the toll of running the firm as “rather intense, and at times, all-encompassing” as the main reason for his decision.
Anderson decided to close his company last year and had already shared the news with his friends, family, and team. While specifying the main reason behind his decision, Anderson wrote, “There is not one specific thing—no particular threat, no health issue, and no big personal issue.”
Hinting at his “desire for relief”, he said in a blog post on Hindenburg Research web site: “at a certain point a successful career becomes a selfish act”. The intent behind opening Hindenburg was Anderson's belief to “prove some things” to himself.
“I have now finally found some comfort with myself, probably for the first time in my life.” Sharing light on the cost of sheer “intensity and focus” to build the firm, Anderson said that he now views “Hindenburg as a chapter” in his life and “not a central thing that defines” him.
The Hindenburg founder also said in his message that the team was winding up the ideas in the pipeline and will now focus on documenting the ways Hindenburg worked.
“The plan has been to wind up after we finished the pipeline of ideas we were working on. And as of the last Ponzi cases we just completed and are sharing with regulators, that day is today,” said Anderson.
What did Hindenburg do?
The US-based investigation research firm engaged in activist short-selling. Its founder, Anderson, managed his company's money and was a short-seller. Anderson used to bet against companies that might have accounting issues, mismanagement, or fraud, which he used to find usually after a long period of investigation, Reuters reported.
Short-selling involves borrowing a stock to sell it, expecting the price to fall. The short seller then repurchases the shares, pocketing the difference. The seller can be exposed to potentially unlimited losses if the price rises.
Hindenburg accusations against Adani
In 2023, Hindenburg released a report against Adani Group, wiping more than $100 billion in value of the Indian conglomerate.
The short-seller accused Adani Group of using offshore tax havens improperly, which the company denied. The report also resulted in scrutiny from the Indian stock markets regulator Securities and Exchanges Board of India (Sebi).
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First Published:16 Jan 2025, 06:35 AM IST
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