From Carl Ichan to Gautam Adani: How short-seller Hindenburg is making a name for itself


Hindenburg Research has established itself as one of the most powerful voices in public activist short-selling, hammering the share prices of multiple big name companies in recent years with its blockbuster reports.

The New York-based activist short-seller, founded by Nate Anderson, has also developed a reputation for its fearlessness, having gone after billionaires like Carl Icahn and Gautam Adani, along with regularly launching big public short bets and serious allegations despite the potential minefield of litigation.

Short selling is the practice of borrowing an asset and selling it on in the hope of buying it back at a lower price, thereby pocketing the difference and profiting from the decline of the asset’s value.

In Hindenburg’s case, this is usually the shares of companies it deems to be houses of cards, or in the company’s words: “Popping bubbles where we see them.”

“With a knack for targeting high-profile companies, Hindenburg’s capacity to consistently produce high-quality, influential research stands in contrast to the, often ridiculously, demanding landscape for short-sellers,” Ivan Cosovic, managing director of data group Breakout Point, told CNBC via email.

Hindenburg has been a standout performer among short sellers over the past few years, according to Breakout Point’s data, regularly leading or appearing near the top of the firm’s annual list of notable achievers.

Cosovic highlighted the “particularly remarkable” number of high-performing short calls the firm puts out annually. Hindenburg’s 10 targets in 2022 experienced an average share price decline of 42%, while its seven targets in 2023 notched an average plunge of 36%, it said.

In the first quarter of 2024, Hindenburg boasted two shorts among the top 10 best-performing short calls in the market, as of March 8: U.S. biotech Renovaro and Swiss-listed fintech Temenos.

Within the space of three days in mid-February, both companies became targets of Hindenburg’s infamous research reports, in which the firm names a short target and sets out its evidence.

Both companies denied the allegations in Hindenburg’s reports, with Temenos saying in a statement that it “contains factual inaccuracies and analytical errors, together with false and misleading allegations,” and that the firm was not contacted for comment in advance.

On Friday, shares of Polish fashion retailer LPP plunged by around 30% as a result of Hindenburg’s latest attack, as it accused the Gdansk-headquartered company of continuing to make money in Russia despite promising to end operations there following the invasion of Ukraine in 2022. LPP dismissed the allegations as “part of an organised disinformation attack” seeking to reduce its share price.

Hindenburg says on its website that “while we use fundamental analysis to aid our investment decision-making, we believe the most impactful research results from uncovering hard-to-find information from atypical sources.”

These situations include accounting irregularities, bad actors in management or key service provider roles, undisclosed related-party transactions, illegal or unethical business or financial reporting practices, or undisclosed regulatory, product or financial issues.

Controversial practice

Breakout Point has tracked 74 Hindenburg short bets it has opened since 2017. Of the 65 positions the company has closed out, 53 saw the target’s share price decline, thereby yielding gains for Hindenburg.

Of the nine short positions currently open, seven of the targets are in the red, two of which have fallen almost to zero.

Short-selling is a controversial practice, since it involves making money from the decline of somebody else’s asset value. Retail investors have mounted campaigns to squeeze hedge funds with short positions against certain assets by buying them en masse, in order drive up the value and force the short-sellers to buy back the shares at a loss or risk losing more money for their clients.

The most famous example of this was the January 2021, when retail traders sent shares of brick and mortar games retailer GameStop soaring with major ramifications for financial markets.

Biggest hits

One of Hindenburg’s biggest recent campaigns centered on a collection of businesses owned by Indian billionaire Gautam Adani.

In January 2023, Hindenburg published a report accusing Adani Group companies of “brazen stock manipulation and accounting fraud.”

The allegations caused tens of billions of dollars to be wiped from the various Adani companies’ stock values and sparked an investigation from the Securities and Exchange Board of India. Adani Group released a 413-page response denying the allegations and threatening legal action.

Gautam Adani’s net worth fell by $6 billion overnight, but the conglomerate and his personal fortune have since recovered, with Adani Group’s market cap more than doubling from the lows reached on the back of the short attack.

Hindenburg Research goes after famed activist investor Carl Icahn

In May last year, Hindenburg went after famed activist investor Carl Icahn’s Icahn Enterprises, alleging “inflated” asset valuations and excess leverage, also triggering a plunge in the company’s share price from which it has yet to meaningfully recover.

Icahn hit back at Anderson’s firm, claiming the report was created “solely” to generate profits on its short position at the expense of Icahn Enterprises’ long-term stakeholders.

Though Icahn and Adani just about weathered the storm, other Hindenburg attacks have uncovered existential faults in target companies.

For example, in 2023, the company uncovered what the U.S. Securities and Exchange Commission later deemed fraud at private investment firm Nanban Ventures and Nigerian fintech conglomerate Tingo Group.

Cosovic highlighted that while Hindenburg is best known for its public short-selling reports, it also plays a significant whistleblowing role in extending its scrutiny to private entities, in some cases.

The firm has also recently spotlighted a series of high-flying Chinese-headquartered companies listed on the Nasdaq, alleging that the tech-heavy New York exchange is permitting “rampant, open fraud.” All the companies involved have denied the allegations.

“I believe this ongoing Nasdaq endeavor nicely highlights Nate Anderson’s commitment to transparency and integrity in financial markets,” Cosovic said.

“Hindenburg Research has injected a breath of fresh air into the domain of public short-selling, revitalizing a sector that found itself beleaguered by SEC investigations and hate from retail investors.”



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