Hindenburg Research: The name is derived from the 1937 Hindenburg disaster, in which a German passenger airship caught fire and killed 35 people.
Shares of Adani Group companies fell sharply after investment research firm Hindenburg Research issued a report alleging “manipulation and accounting fraud” by the group. The firm stated that the Adani Group has “substantial debt” and that their valuations are down by 85%.
Responding to the allegations, Adani Group described the report as a “malicious combination of selective misinformation and stale, baseless and discredited allegations”.
What exactly is the Hindenburg Research?
It is a financial research firm based in the United States. Accounting irregularities, illegal or unethical practices, and unreported issues are all investigated.
“Our experience in the investment management industry spans decades, with a historical focus on equity, credit, and derivatives analysis,” it says on its website.
“While we use fundamental analysis to help us make investment decisions, we believe the most impactful research comes from uncovering hard-to-find information from unusual sources,” it continues.
What is the significance of the name “Hindenburg” Research?
It was named after the Hindenburg disaster, which occurred in 1937 when a German passenger airship caught fire, killing 35 people.
“We consider the Hindenburg to be the epitome of a completely man-made, completely avoidable disaster. Almost 100 people were loaded onto a balloon filled with the universe’s most flammable element (hydrogen). Despite the fact that dozens of previous hydrogen-powered aircraft had met with similar demises.
Nonetheless, the Hindenburg’s operators persisted, citing the oft-quoted Wall Street maxim that “this time is different,” according to its website.
“We look for similar man-made disasters floating around in the market and hope to shed light on them before they lure in more unsuspecting victims,” the report continues.
How did it come about?
Nathan Anderson, a University of Connecticut student studying international business management, founded the company in 2017. He lived in Jerusalem before returning to the United States, where he worked as a broker for several firms.
Anderson had previously worked with Harry Markopolos, who had identified Bernie Madoff’s Ponzi scheme. It went on to become the largest financial fraud in history.
The Financial Times quoted Markopolos as saying, “He [Anderson] is an expert digger…If there are facts, he will find them, and all too often, he will discover skeletons in the closet “.
“We come in and try to illuminate some of these problems that might be lurking under the surface at some of these companies, in some of these industries, and see if we can make things better,” Anderson told the Financial Times.
What other businesses has Hindenburg written about?
It published a report on Nikola titled “Nikola: How to Parlay An Ocean of Lies Into a Partnership With America’s Largest Auto OEM” in 2020. It accused Nikola of “a vast array of alleged lies and deceptions” in the years leading up to its proposed partnership with General Motors.
Nikola is an electric vehicle manufacturer that was charged with deceiving investors by telling them about new vehicles that did not exist in reality.
WINS Finance, China Metal Resources Utilization, HF Foods, and Riot Blockchain have all received reports from the research firm.