Demystifier: An ED Original where we take a complex topic but the content is written in such a way that it is knowledgeable and easy to comprehend at the same time.
On 24th January, one single report managed to break out chaos of all kind for the Adani Group, one of the wealthiest companies in the world and managed to bring about a loss of a whopping Rs. 48,000 crore in market value in a single swoop.
The report titled “Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History” was published by a US based investment research firm called Hindenburg Research and was shared on their Twitter on 25th January. The report made several claims about stock manipulation, debt levels and the use of tax havens among various other things.
According to the report the “Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades”.
Their data collection for the report “involved speaking with dozens of individuals, including former senior executives of the Adani Group, reviewing thousands of documents, and conducting diligence site visits in almost half a dozen countries”.
But while the word ‘Hindenburg’ has been splashed all across media and social media posts, what exactly is the Hindenburg Research?
Hindenburg Research
Nathan Anderson a Chartered Financial Analyst (CFA), started an investment research firm called Hindenburg Research in 2017. It is basically as per a Washington Report a “research and trading outfit, not a hedge fund with outside investors” and specialises in forensic financial research including issues like
- “accounting irregularities,
- undisclosed related-party transactions,
- illegal or unethical business or financial reporting practices,
- undisclosed regulatory or financial issues” and more.
As per its website it specifically looks for “man-made disasters,” and the University of Connecticut alumn founder has had experience from having worked at various firms like FactSet Research Systems, Blue Heron Capital, Tangent Capital and ClaritySpring Inc.
The name of the company comes from the Hindenburg tragedy of 1937 which had the German passenger airship of the same name bursting into flames when it landed in New Jersey, United States and ended up killing 35 passengers and crew-members.
The firm’s website states that “We view the Hindenburg as the epitome of a totally man-made, totally avoidable disaster. Almost 100 people were loaded onto a balloon filled with the most flammable element in the universe. This was despite dozens of earlier hydrogen-based aircraft meeting with similar fates. Nonetheless, the operators of the Hindenburg forged ahead, adopting the oft-cited Wall Street maxim of “this time is different.”
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It further writes that “We look for similar man-made disasters floating around in the market and aim to shed light on them before they lure in more unsuspecting victims.”
How Many Companies Targeted
Even though the firm is just around 5 years old, since then it has already posted research reports on at least 16 companies.
While the Adani Group might be the one making the most media noise right now, the firm has not held back in their reports against some big names including some like:
- Nikola,
- WINS Finance,
- China Metal Resources Utilization,
- SC Worx,
- Predictive Technology Group,
- SmileDirectClub and
- Yangtze River Port & Logistics
It is interesting to note that Anderson is not a very big name among the Manhattan financial circles, which could also, as just a theory, be to make sure that his reach remains low or perhaps itself chooses to remain lowkey in order to be able to conduct its research.
Image Credits: Google Images
Sources: Business Today, Washington Post, Financial Express
Find the blogger: @chirali_08
This post is tagged under: Hindenburg Research adani, Hindenburg Research, Hindenburg Research firm, Nathan Anderson, Nathan Anderson Hindenburg Research, gautam Adani, gautam Adani report, gautam Adani loss, gautam Adani Hindenburg Research, adani group Hindenburg Research, adani group report, adani group controversial report
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