Hindenburg Research, a research and investment firm, is closing down, its founder Nate Anderson announced on January 6, 2023. The company, known for exposing corporate fraud and Ponzi schemes, has published negative research reports about dozens of companies since its founding in 2017.
Anderson’s decision to disband the firm came after completing a pipeline of ideas and a final report on several Ponzi cases, which were shared with regulators. Hindenburg’s reports often targeted smaller companies, as well as those of major financial figures, including Carl Icahn’s Icahn Enterprises LP and Indian billionaire Gautam Adani.
One of its most notable reports was on Nikola, a vehicle startup, which alleged that the company had faked the autonomous capabilities of a semi-truck in a video. The founder of Nikola, Trevor Milton, was later sentenced to four years in prison.
The company was also known for its short-selling activities, where it would bet against the companies it researched. This put it in a position to profit if the stock declined. While it’s unclear how much money the firm made from its short bets, some stocks saw immediate negative reactions after the reports were published.
The rise of Hindenburg came at a time when the practice of short selling was falling out of favor elsewhere. The meme-stock craze of 2021 pitted retail investors against hedge funds, leading some professional investors to back away from short selling. Federal officials have also investigated other short sellers in recent years, including the Department of Justice’s securities fraud charges against Citron’s Andrew Left. Hindenburg’s most recent report was on auto retailer Carvana, which it called a “father-son accounting grift for the ages.” Carvana’s stock fell 11% the day after the report was published, but has since recovered.
