In a report on Wednesday, short-seller Hindenburg Research identified short holdings in India’s Adani Group, raising concerns about possible stock manipulations and accounting fraud. Bonds and stock prices for the conglomerate’s companies fell as a result of the claims.
In the past, Hindenburg has discovered corporate misconduct and gambled against the corporations.
Hindenburg Research is a renowned forensic financial research company that examines equity, credit, and derivatives. It was founded in 2017 by Nathan Anderson.
Hindenburg claims on its website that it searches for man-made disasters including accounting irregularities, poor management, and hidden related-party activities. The business makes its own investments.
It was given that name in honour of the notorious 1937 airship tragedy known as the Hindenburg, which caught fire as it crashed into New Jersey. Following the discovery of potential misconduct, Hindenburg often produces a report outlining the case and places wagers against the target corporation in an effort to benefit.
Nathan Anderson began his career in finance with data provider FactSet Research Systems Inc., where he dealt with investment management firms after graduating from the University of Connecticut with a significant degree in international business.
He told the Wall Street Journal (WSJ) in 2020 that there was an awareness that they were performing a lot of routine analysis and that there were a lot of homogeneities. He had previously worked for a brief period in Israel as an ambulance driver. Based on the short seller’s LinkedIn profile, this helped him gain experience acting and thinking under pressure.
Anderson has stated in interviews that Harry Markpolos, a remarkable analyst who was the first to recognise Bernie Madoff’s Ponzi scheme, is his hero.
The wager that Hindenburg is best known for made against the manufacturer of electric trucks Nikola Corp (NKLA.O) in the month and year of September 2020 resulted in “a significant win,” though he declined to give specific figures to the WSJ.
The short seller claimed Nikola misled investors over its technological advancements. Anderson disputed a Nikola video that appeared to show its electric truck driving rapidly when, in reality, the truck was being rolled down a slope.
Last year, a U.S. jury found Nikola’s creator Trevor Milton guilty of fraud on charges that he misled investors. In 2021, the firm decided to settle with the US Securities and Exchange Commission over its statements to investors by paying $125 million.
Nikola began trading publicly in June 2020, and a few days later it outperformed Ford Motor Company in terms of valuation, reaching $34 billion (F.N). It is currently valued at $1.34 billion. Whistleblowers and former employees, as known to Hindenburg, assisted with its research.
On its website, Hindenburg claims to have raised suspicions of misconduct in at least 16 businesses since 2017. It took a brief and subsequently a long position in Twitter Inc. last year.
In May, Hindenburg said that it was brief because it thought Elon Musk’s $44 billion plan to take the firm private may be renegotiated at a cheaper price if he decided not to proceed.
Anderson revealed a “large long position” against Musk in July. In October, the purchase of Twitter was completed at the initial price.
On the other hand, cutting costs is also essential for Tesla’s upcoming phase of growth, which Musk said the business would discuss at its investor day in March. These plans concern an inexpensive EV that analysts have predicted will cost under $35,000.
Tesla reportedly intends to release an updated Model 3 sedan late this year under the code name “Highland,” with an emphasis on lower production costs.
In the fourth quarter, the company’s average price per car, taking into account all of its expenditures, was close to $44,000.
Price is really important. According to Musk, there are a lot of people who want to acquire a Tesla but are unable to do so.