What is Hindenburg Research? Why tussle with Adani Group?

Hindenburg Research was founded in 2017 by Nate Anderson, CFA, CAIA, and the firm specializes in forensic financial research.

The tussle between the Adani Group and US-based investment research firm Hindenburg Research has been on since Hindenburg released a report accusing Adani of engaging in “manipulation and accounting fraud”. Following this, Gautam Adani’s net worth took a drastic hit after the bonds and shares of seven listed Adani group companies fell sharply.

According to the Bloomberg Billionaires Index, Gautam Adani lost nearly $6 billion (roughly Rs. 48,600 crores) in a single day, down nearly 5 percent, and his net worth currently stands at $113 billion as of January 26, 2023. On Thursday, Hindenburg Research responded. on the threat of legal action from the Adani group, saying it stood by its report.

“Regarding the company’s threats of legal action, to be clear, we would welcome it. We stand by our report in full and believe that any legal action taken against us will be frivolous,” Hindenburg Research said on Twitter. Will be

Hindenburg, in its report, said it has taken short positions in Adani group companies through US-traded bonds and non-Indian-traded derivative instruments. So, what exactly is Hindenburg Research and what does it do? How did it come into existence? And what has been its track record over the years?

What is Hindenburg Research?

Hindenburg Research was founded in 2017 by Nate Anderson, CFA, CAIA. The company specializes in forensic financial research, the company says on its website. It brings experience in the investment management industry spanning decades with a historical focus on equity, credit and derivatives analysis. The website states, “While we use fundamental analysis to aid in our investment decision-making, we believe that uncovering difficult-to-find information from unusual sources yields the most impactful research results.”

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A June 2021 Financial Times article stated that Nate Anderson lived in Jerusalem before returning to the United States, where he worked as a consultant for a financial software company called FactSet.

Later, he joined a broker dealer firm in Washington DC and New York. Prior to starting the research company, Anderson also worked with Harry Markopolos, who flagged Bernie Madoff’s Ponzi scheme.

The company’s name is based on the Hindenburg tragedy in which 35 people died when a German passenger airship caught fire. “We see the Hindenburg as a symbol of an entirely man-made, entirely avoidable disaster. About 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 a similar fate. Nevertheless, the operators of the Hindenburg went ahead, adopting the oft-quoted Wall Street maxim of “this time is different”, as they state on their website.

It further added, “We see similar man-made disasters floating around the market and aim to shed light on them before they attract more unsuspecting victims.”

Companies Hindenburg wrote about

Previously, Hindenburg released reports on companies such as Nikola, WINS Finance, Genius Brands, China Metal Resources Utilization, SC Worx, HF Foods, Riot Blockchain and others.