It was January 2023. Shares of Adani Group had seen a massive rally over the previous year. Then US-based Hindenburg Research, a short-seller little known in India at the time, sent shockwaves releasing a report levelling allegations of financial misconduct and stock price manipulation against Adani Group. Over the next few months shares of listed companies of the group sank, wiping off around $150 billion in their value.
The short-seller released another report in August 2024, this time accusing the chairperson of market regulator SEBI of having held stakes in offshore funds that had links with the Adani Group. The fresh set of accusations further dented Adani Group's fortunes, which had recovered from the earlier losses by then, and even echoed in the Parliament, with the opposition demanding a joint parliamentary committee probe.
On Thursday morning, Adani Enterprises shares were up 2 per cent. Adani Ports gained over 2.5 per cent, and Adani Green Energy surged near 4 per cent. Adani Power was also up 2 per cent and Adani Energy Solutions rose 1.5 per cent, after the founder of Hindenburg announced the firm was closing.
The Adani Group was not the only corporate entity that Hindenburg, founded in 2017, took on, and it was certainly not the first. Back in 2017, HIndenburg investigated Eros International. The research firm revealed significant accounting irregularities at the Indian film company that was listed in the US.
That same year it released a report on Opko Health, headlined "a house of cards tumbling in the dark."
In the subsequent years, Hindenburg would take on companies like Yangtze River Port, Bloom Energy, Sorrento Pharmaceuticals, Ebix Inc, Icahn Enterprises among others. In 2020, it accused US-based electric vehicle maker Nikola stating it was an "intricate fraud built on dozens of lies over the course of its founder's career."
Hindenburg was an investment research firm founded by Nathan Anderson in 2017. The company would investigate corporations and release reports on its website disclosing corporate frauds. But, while doing so, Hindenburg would also take short-positions on the company it was investigating at a particular time, to profit from the share price crash after its report was made public.
Anderson announced on Thursday, he was disbanding the firm, what he called had been "the adventure of a lifetime." Behind closing the firm, he said there had been no particular threat or no health issue and no big personal issue eiither.
"The intensity and focus has come at the cost of missing a lot of the rest of the world and the people I care about," he pointed. Beyond his own desire "for relief," he said it felt "selfish" to keep the knowledge accumulated trapped within their small team.
Over the next 6 months Anderson plans to work on a series of materials and videos to open-source every aspect of the firm's model and how they conduct their investigations, hoping in a couple of years, some one would learn the craft and find confidence on shedding light on a subject that needs it.
Over time, he had built a team of 11 people. Anderson said that he will make sure everyone on the team lands where they want to be next. Some are going to start their own research firm, which he will strongly and publicly encourage, without having any personal involvement, Anderson added.
