A US-based short-selling company known for publishing reports alleging financial misconduct by top financial entities in India and abroad is disbanding.
Nate Anderson, the founder of Hindenburg Research, announced on Wednesday the closure of the company nearly eight years after its establishment without stating a specific reason but expressing a desire to prioritize spending time with loved ones in the future.
Established in 2017, Hindenburg Research gained prominence for uncovering suspected financial irregularities within prominent businesses. The company's reports have resulted in substantial market value declines for various businesses in India and overseas.
In 2020, the firm exposed electric truck manufacturer Nikola Corp for misleading investors regarding its technologies. In 2022, the company's founder, Trevor Milton, was found guilty of deceiving investors and convicted of fraud.
In 2023, Hindenburg Research published a report accusing the Adani group of engaging in decades of "brazen" stock manipulation and accounting fraud. Mr. Adani and his company refuted the accusations, labeling them as "malicious" and an "attack on India."
The allegations by the firm triggered heated political debates in India, with the country's primary opposition Congress party blaming Prime Minister Narendra Modi's Bharatiya Janata Party (BJP) for not taking action against the Adani group.
Mr. Adani, one of Asia's wealthiest individuals, is perceived to have close ties with Mr. Modi and has frequently faced accusations from opposition leaders that he has profited from political connections, charges he denies.
Anderson expressed an intention to make Hindenburg's research methodology publicly available in the future by stating, "Over the next six months or so, I plan to work on a series of materials and videos to open-source every aspect of our model and how we conduct our investigations."
Short-sellers like Hindenburg specialize in betting against the stocks of companies they suspect of involvement in fraudulent activities based on their research. This approach involves borrowing a stock, selling it immediately, and repurchasing it at a lower price to profit from the difference.