Hindenburg Research LLC is a short seller known for exposing fraud. Currently, it is in the news for its scathing report on India’s Adani Group, accusing it of stock manipulation and accounting fraud.
The Nathan Anderson-founded company sniffs out accounting regularities, iffy management, undisclosed related-party transactions, and other such irregularities, according to its website.
Hindenburg’s latest report on companies headed by Asia’s richest man, Gautam Adani, led to a bloodbath in their shares last week, even after the group offered a point-by-point rebuttal to the short seller’s claims.
This is not the first time Hindenburg has caused such consternation. The New York-based company’s reports and comments have had dramatic results in the past.
Nikola Fraud: In September 2020, Hindenburg released a report on the electric car maker Nikola Corporation (NASDAQ: NKLA), which had at the time styled itself as a potent emerging rival to Elon Musk–led Tesla.
At the time, Hindenburg said Nikola was “an intricate fraud built on dozens of lies.” It specifically called out a video titled “Nikola One in Motion” which appeared to show a Nikola truck driving down a desert, which the short seller said was actually towed to the top of a hill and released. The end result of the Nikola expose was a victory for short sellers and the unceremonious exit of founder and Executive Chair Trevor Milton. In October 2022, Milton was convicted of fraud. He faces up to 20 years in prison.
Goes Long On Twitter, Pulls A 180º On Musk: In June last year, Hindenburg changed its thesis on Twitter — the social media giant was then an acquisition target by Musk. The change of heart came just as Twitter sued Musk to complete the $44 billion acquisition abandoned by him.
“We have accumulated a significant long position in shares of Twitter. Twitter’s complaint poses a credible threat to Musk’s empire,” tweeted Hindenburg at the time.
See Also: Gautam Adani Falls Below Bill Gates, Warren Buffett On World Rich List Amid Stock Market Rout
Previously, the short seller had said Musk held all the cards in the Twitter situation and that there were multiple factors that suggested that the billionaire was not getting value for the social media platform that he was when he announced his offer.
Riot Blockchain A ‘Crypto Clown Car’: Hindenburg went after Riot Blockchain (NASDAQ: RIOT) in a series of articles dating back to 2017. The writeups covered suspicious acquisitions that Hindenburg said were designed to benefit insiders.
A CNBC report said Riot’s business was full of many “red flags.” Ultimately, the CEO and Chair of Riot resigned in 2018 after unrelated charges were filed by the U.S. Securities and Exchange Commission, according to a separate report.
Hindenburg disclosed it was short Riot in 2018 in a report titled, “Riot Blockchain: This Crypto Clown Car Continues Hurtling Toward The Abyss.”
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Source: https://finance.yahoo.com/news/adani-isnt-first-elon-musks-104344093.html