Hindenburg Research, a firm founded in 2017 has often been in the news for causing companies to go into massive loss by publishing reports exposing fraud and financial problems in them, ultimately making their stock price fall heavily.
The firm also made a profit using the method of short-selling after its reports would cause the stock prices of those companies to fall.
One of their biggest reports was their 2023 one on the Adani Group that wiped out a whopping $100 billion in value from group shares after its release. Hindenburg in its report accused Adani of “brazen stock manipulation and accounting fraud scheme over the course of decades.”
The firm founded by 40-year-old Nate Anderson also accused the Adani Group of Gautam Adani of “pulling the largest con in corporate history.”
According to an India Today report the “market capitalisation of 10 Adani Group companies fell from Rs 19.19 lakh crore on 24 January 2023 to below Rs 7 lakh crore by February 27.”
Adani Group then accused Hindenburg Research of making a “a calculated attack” on India, in response to which Hindenburg released a statement claiming that Adani had dodged questions raised by their report and instead was making threats.
Hindenburg Shutting Down
However, on 16 January 2025, a blog post titled ‘Personal Note From Our Founder’ on Hindenburg’s website revealed that the firm would be shutting down.
Nate Anderson the founder wrote, “As I’ve shared with family, friends and our team since late last year, I have made the decision to disband Hindenburg Research. The plan has been to wind up after we finished the pipeline of ideas we were working on. And as of the last Ponzi cases we just completed and are sharing with regulators, that day is today.”
He further talked about how “Sometimes this meant taking big swings and taking on fights that are much bigger than any of us as individuals. Fraud, corruption, and negativity often seem overwhelming. Early on, a sense of justice was usually elusive. When it happened, it was tremendously fulfilling. It kept us going when we needed it.”
Speaking about the impact of the firm he wrote, “And boy did we have an impact, eventually—more than I imagined was possible at the outset. Nearly 100 individuals have been charged civilly or criminally by regulators at least in part through our work, including billionaires and oligarchs. We shook some empires that we felt needed shaking.”
Anderson also clarified the reason for the disbanding writing “There is not one specific thing—no particular threat, no health issue, and no big personal issue,” and that he “now view Hindenburg as a chapter in my life, not a central thing that defines me.”
The timing of the firm shutting down though and how it’s come out of the blue has raised several questions about the real reason behind it. Some experts and reports have given their two cents on why this could have happened:
Model To Benefit
Ajay Bagga, a prominent stock market expert and seasoned investor commented on Hindenburg’s shutdown and speculated why this could be besides the official one given in the founder’s statement.
Bagga in a post on his X/Twitter page listed five reasons for the closure writing:
“1. It operated in a grey zone, publishing negative reports and taking short positions, including via hedge funds who were not disclosing their positions
2. Short sellers hardly ever make sustained profits. That is why the few who do , as for example in 2008, are celebrated so much. The rest make hardly any returns over the long term
3. Some regulatory action may have taken place and a way to skip penalties may be an agreement to quietly shut down. Hope they get prosecuted and are not let off so easily in case some regulatory or legal action is ongoing against them.
4. Damage has been done to companies, promoters and markets by targeted attacks from which they sought to benefit .
5. This was no altruistic, “truth seeking” endeavour, it was a model to benefit from issuing scathing reports on companies and promoters and simultaneously shorting them in advance of the release of these damaging reports.”
He ended his post by writing that the firm “Won’t be missed. Dismissed.”
Legal Pressure
A report by The Africa Logistics also took a look at some reasons according to market observers that could be behind the disbanding writing:
“Legal and Regulatory Pressures: Activist short-sellers have faced increased scrutiny and lawsuits from targeted companies, raising the stakes and risks associated with their work.
Changing Market Dynamics: A shift toward stricter regulatory oversight and growing public skepticism about short-selling tactics may have impacted the firm’s operations.
Economic Considerations: With heightened market volatility and reduced opportunities for short selling in some sectors, the firm’s profitability could have been challenged.”
Read More: What Is Hindenburg Research That Released The Controversial Report On Adani Group?
‘Supari’ Against Indian Economy
Of course, the Bharatiya Janata Party (BJP) jumped onto the occasion and slammed the firm claiming that Hindenburg’s report against Adani, which is supposedly one of their biggest reports yet, was sponsored, organised, orchestrated, and manipulated act of economic anarchism, and economic terrorism.
Shehzad Poonawall, the BJP Spokesperson was quoted by ANI commenting on Hindenburg that the “Hindenburg report was ‘supari’ taken against India’s rising economic power. This report was a sponsored, organised, orchestrated and manipulated act of economic anarchism and economic terrorism…Rahul Gandhi, your international alliance partner Hindenburg has shut its shop, now when will you stop your propaganda against India? What is your relationship with Hindenburg? Was it a Soros-sponsored report? Today, Congress should clarify and apologise. Congress and its eco-system are anti-national.”
Poonawalla further said, “What is evident from the news that has just emerged that Hindenburg has shut down its shop, then it was nothing more than a motivated, sponsored, organised and targeted attack directed to de-stabilise the Indian economy. It was nothing short of an act of economic anarchism and economic terrorism.”
Avoid India-US Joint Investigation
According to an NDTV report, there is a potential India-US joint investigation that Hindenburg could be trying to avoid.
Senior lawyer Sidharth Luthra speaking with NDTV said, “After the Supreme Court ordered an investigation, it’s quite natural for anyone to ask ‘why is he shutting it down?’ If he is truthful, if he is so sure, then join the agencies in the investigation. I don’t think it is a good thing for Hindenburg to disband.”
Rajya Sabha MP and senior lawyer Mahesh Jethmalani also questioned the timing of the firm’s shut down speculating that it could be to avoid scrutiny from US authorities.
He said, “Either he has already been sounded out by investigating authorities in the US or he fears that he will be investigated for his role in the attempt to shake India’s economy by bare hammering of Adani shares.”
Jethmalani calling it an act of “economic terrorism” to destabilise India also claimed that this development could be linked to the “democratic deep-state” supposedly led by billionaire George Soros.
BJP leader Amit Malviya also seemed to touch upon this writing in an X/Twitter post, “Hindenburg Research’s decision to disband comes as little surprise, coinciding with the Trump administration’s transition into office. As the US Department of Justice plans to investigate the firm’s operations, it’s worth reflecting on how Rahul Gandhi and the Congress party relied on Hindenburg’s reports. They frequently held press conferences and disrupted parliamentary proceedings, basing their actions on findings from this dubious George Soros-funded organization.”
Donald Trump?
The timing of the announcement, coming just days before the inauguration of Donald Trump as the new President of the United States of America (USA) has also raised speculation.
According to reports, Lance Gooden, a Republican lawmaker, and a House Judiciary Committee member, also a few days ago asked the US Department of Justice to preserve all the records that were associated with the Adani case.
Reports believe that the Trump government could potentially be investigating several US Department of Justice cases which could include the Adani case.
Donald Trump has also criticised short-sellers in the past and it is expected that his return to power could lead to regulations making things harder for firms like Hindenburg. In 2024 there were allegations that short-sellers were hurting the value of Trump Media & Technology Group’s, parent company to Truth Social, stocks.
CEO Devin Nunes accused them of it and Trump in a November 2024Truth Social post also wrote, “There are fake, untrue, and probably illegal rumours and/or statements made by, perhaps, market manipulators or short sellers, that I am interested in selling shares of Truth. THOSE RUMORS OR STATEMENTS ARE FALSE. I HAVE NO INTENTION OF SELL … !”
Reports further claim that Trump called for investigations into these rumours and who was spreading them.
Image Credits: Google Images
Sources: Mint, NDTV, Times of India
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