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Wall Street’s pre-eminent short seller is calling it quits
Hindenburg Research founder Nate Anderson, a foe of Carl Icahn and the Adani family, cites the stress of his job as he shuts down the firm.
Nate Anderson plans to share resources and training materials so others can use Hindenburg’s tactics.
Nate Anderson, the short seller who wiped billions of dollars off the market values of companies including Nikola and Icahn Enterprises, is shutting down his firm, Hindenburg Research. He cited the toll the work took on his well-being.
“I’ve spent most of the last eight years either in a fight or preparing for the next one,” he said in an interview with The Wall Street Journal.
Anderson said he felt that he and Hindenburg had accomplished what they had set out to do, showing it was possible to build a business from hunting fraud and other issues in public and private markets. He hopes to soon share resources and training materials so others can use Hindenburg’s tactics in their own investigations.
He said he looks forward to taking up hobbies, traveling and spending time with his fiancée and their child, adding that he has earned enough money to provide for them into the future. He said he plans to invest his money in index funds and other low-stress investments.
Prominent short sellers have retreated in recent years. Online armies of individual traders targeted those who bet against the rapid rise in GameStop shares, including now-defunct Melvin Capital, which lost $1 billion in a single day. Short seller Andrew Left was indicted last year on allegations he manipulated stock prices. He has pleaded not guilty.
The scrutiny and risk, as well as a decadelong bull market and the rise of multistrategy funds, has made short sellers something of an endangered species. Jim Chanos, whose short of Enron became legendary, closed his once-$6 billion fund in 2023. Well-known hedge-fund managers such as Bill Ackman and Daniel Loeb have shied away from publicly shorting in recent years.
Hindenburg seemed to be an exception. It built a reputation for diligent research and novel investigative techniques. It was behind many of the highest-profile bets against stocks over the past few years.
Anderson, who started Hindenburg in 2017, was part of a surge in so-called activist short sellers. They not only placed their bets against companies’ shares but used digital media to share their research with the market, hoping to profit from turning sentiment against their targets.
Unlike many of its peers, Hindenburg never managed other people’s money. Instead, the firm shared its ideas with other funds for a cut of profitable trades, invested its own capital and shared its research with government agencies in hopes of earning rewards.
Anderson started Hindenburg on his own and was quickly sued by three early targets. Swamped with legal costs, he received eviction notices from his apartment’s landlord. Anderson’s company survived, however, and struck gold with its short of Nikola, one of the market’s hottest debutantes, in the summer of 2020. The firm has since expanded to about a dozen employees.
The firm alleged the companies it targeted were overvalued for reasons including malfeasance, manipulation and accounting chicanery. Its work prompted several enforcement actions and investigations by regulators and law enforcement.
In 2023, the firm scraped the entire corporate registry of the island of Mauritius to find companies it alleged were used by India’s Adani family, at the time one of the world’s richest, to manipulate their companies’ share prices.
An Adani office in Gurugram, India. Hindenburg alleged that the Adani family manipulated stock prices.
Carl Icahn, the activist investor who owns most of the partnership bearing his name, was forced to renegotiate billions of dollars in loans he had taken against the stock when its price crashed after Hindenburg alleged it was overvaluing assets and was overleveraged. More than a year later, the company’s shares remain down more than 80%, or more than $13 billion in value.
Not all of Hindenburg’s picks have been winners. Since publishing a report about children’s game platform Roblox last October, the company’s shares are up roughly 50%. The company added parental controls that addressed many of the allegations in Hindenburg’s report.
Hindenburg’s work was followed closely by regulators and law enforcement.
Trevor Milton, founder and chairman of Nikola, was convicted in 2022 on three counts of fraud after an indictment that referenced several of the allegations in Hindenburg’s report. He is appealing the verdict.
Last November, Gautam Adani was indicted on securities-fraud charges stemming from an alleged foreign bribery scheme. Federal prosecutors began investigating Super Micro Computer within weeks of Hindenburg publishing its research against the company, the Journal reported.
Icahn Enterprises disclosed that it received a subpoena from the Justice Department on the day after Hindenburg published its report. Last year the company settled Securities and Exchange Commission charges that it hadn’t properly disclosed Icahn’s loans against the stock, paying $2 million. The company neither admitted nor denied wrongdoing.
Write to Ben Foldy at ben.foldy@wsj.com
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First Published:16 Jan 2025, 12:42 PM IST
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