Hindenburg Research

American short-selling activist firm

Hindenburg Research LLC

Trade name

| Hindenburg Research
Company type| Private
Founded| 2017; 8 years ago (2017)
Founder| Nathan Anderson
Defunct| January 15, 2025 (2025-01-15)
Headquarters| New York City, United States

Number of employees

| 11 (2024)[1]
Website| hindenburgresearch.com

Hindenburg Research LLC was a U.S. investment research firm with a focus on activist short-selling founded by Nathan Anderson in 2017.[2][3][4] Named after the 1937 Hindenburg disaster, which they characterize as a human-made avoidable disaster,[5] the firm generated public reports via its website that allege corporate fraud and malfeasance.[6] Companies that were the subjects of their reports include Super Micro Computer,[7] Adani Group, Nikola,[8] Clover Health,[9] Block, Inc.,[10] Kandi,[11] and Lordstown Motors.[12] The reports also featured defenses of the practice of short-selling and explanations of how short-sells "play a critical role in exposing fraud and protecting investors."[13] The firm disbanded in January 2025 with a note on its website from Anderson.[14] At the time, the Wall Street Journal described it as "Wall Street’s Pre-Eminent Short Seller".[15]

In January 2025, Hindenberg Research shut down.[16][17] Carvana was the subject of Hindenburg's final report.[18][19]

## Operations

[edit]

Hindenburg Research prepared investigation reports on target companies by going through their public records, internal corporate documents and by talking to employees. Each report was then circulated to Hindenburg's limited partners, who, together with Hindenburg, took out a short position in the target company before publicly releasing the report. Hindenburg profited if the target company's share price declined.[20][21]

## Notable research

[edit]

### Nikola report

[edit]

Main article: Trevor Milton § Fraud allegations and trial

In September 2020, Hindenburg Research published a report on the Nikola Corporation, a company which had teamed up with General Motors to produce hydrogen and battery powered electric trucks, alleging the company of being "an intricate fraud built on dozens of lies" and argued that its founder, Trevor Milton, was responsible for much of the fraudulent activities.[2] Following the release of the report, Nikola's stock dropped by 40%[8] and a Securities and Exchange Commission (SEC) inquiry was opened.[22] While Milton initially disputed the allegations,[22] he later resigned from his position as Executive Chairman[23] and was eventually found guilty of wire and securities fraud.[24] In November 2020, Nikola stated that they had "incurred significant expenses as a result of the regulatory and legal matters relating to the Hindenburg Report.”[2] On February 19, 2025, the company filled for Chapter 11 Bankruptcy, as a result of Hindenburg Research's report.[25]

### Clover Health report and Chamath Palihapitiya

[edit]

Hindenburg released a report about Medicare Advantage plan of Clover Health in February 2021, claiming that the company neglected to inform investors about it being under investigation by the Department of Justice. The report also argued that billionaire stock promoter and entrepreneur Chamath Palihapitiya neglected his due diligence and misled investors as he took the company public via special purpose acquisition company.[9] Hindenburg disclosed that it has no short or long positions in Clover.[26] Immediately following its publishing, Clover Health dismissed the accusations in the report and also stated it received a notice from the SEC.[27]

### Adani Group report

[edit]

See also: Adani Group § Stock manipulation and accounting fraud allegations

In January 2023, Hindenburg reported that it had short positions in India's Adani Group and flagged debt and accounting concerns. Concurrently, Hindenburg released a report claiming that Indian conglomerate Adani Group "has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades."[28] Soon after the report's release, Adani Group companies experienced an acute decline in their share prices.[29][30][31] In a follow-up piece, The Guardian indicated that Hindenburg called on the Adani Group to sue if they believed the report was inaccurate.[32][33] By the end of February 2023, the group lost $150 billion in value. Gautam Adani's personal net worth came down as he fell from 3rd richest in the world to 30th richest within a month after the report was published.[34][35][36]

Adani Group responded by accusing Hindenburg Research of launching "a calculated attack" on India.[37] In response, Hindenburg Research released a statement saying that Adani had dodged key questions raised by the firm's report and instead resorted to threats. The firm stated they stand by their statement and dared Adani group to sue.[38]

Due to the allegations, American finance company MSCI cut the free-float status of four Adani firms and Moody's Investors Service downgraded the ratings outlook of four firms.[39] Credit Suisse Group AG stopped accepting bonds of Adani companies as collateral for margin loans to its private banking clients.[40]

The Securities and Exchange Board of India (SEBI) issued a show cause notice to Hindenburg Research, accusing them of using non-public information to short Adani group stocks, causing a $150 billion market value loss. SEBI claims Hindenburg's report misled readers and created panic. Hindenburg denies the allegations, calling SEBI's actions an attempt to silence critics and asserting minimal profits from the Adani shorts.[41]

In August 2024, Hindenburg Research released a report accusing SEBI chairperson Madhabi Puri Buch and her husband, Dhawal Buch of having a stake in dubious offshore entities used to artificially inflate shares of companies owned by the Adani Group. The report says, "We find it unsurprising that SEBI was reluctant to follow a trail that may have led to its own chairperson".[42] The couple later denied the claims.[43][44]

### Allegations of illegal activity against Block

[edit]

On March 23, 2023, Hindenburg disclosed a short position in Block, leading to a 15% drop in the company's shares that day. Hindenburg accused Block of exaggerating user counts, failing to curb fraud and illegal activity on Cash App, and permitting impersonation of high-profile individuals. It also wrote in its report that Block "embraced predatory offerings and compliance worst practices in order to fuel growth and profit from facilitation of fraud against consumers and the government."[45][46] Block denied the allegations and said it would explore legal action against Hindenburg.[47]

NBC News reported in May 2024 that prosecutors at the Southern District of New York were examining financial transactions and internal practices at Block, stemming from alleged compliance lapses at its Square and Cash App units. According to the report, the company allegedly failed to collect adequate information from customers, processed transactions involving countries subject to economic sanctions, and processed cryptocurrency transactions for terrorist groups.[48] In November 2024, Block disclosed in its earnings report for July–September 2024 that it was negotiating a potential settlement with several state regulators that had probed the company's anti-money laundering program. Additionally, Block stated it was negotiating a potential settlement with the Consumer Financial Protection Bureau (CFPB) in matters including those related to Cash App's handling of customer complaints and disputes. The company added it had accrued a liability for estimated amount in connection with each potential settlement and the amount was not material to the company's financial statements as of September 30, 2024.[49][50]

### Icahn Enterprises report

[edit]

In May 2023, Hindenburg released a report on Icahn Enterprises, which fell over 50% in the month after Hindenburg disclosed a short position against it.[51] They classified the structure of Icahn Enterprises' dividend structure as "ponzi-like", and noted Jefferies Group's research on Icahn Enterprises as being "one of the worst cases of sell-side research malpractice we’ve seen".[52]

## Additional reports

[edit]

Hindenburg also issued reports concerning the online betting operator DraftKings,[53] the geothermal power plants company Ormat Technologies,[54] electric car company Mullen Technologies,[55] and a Chinese blockchain and cryptomining firm named SOS.[56]

In March 2023, Hindenburg released a report on Jack Dorsey's Block, alleging overstated user counts, accounts being used for illegal activities, a potential investigation from the SEC, and failing to ban fraudsters from its platform.[57] This immediately led to a 22% drop in the company's shares before a partial recovery later in the day.[58]

In June 2023, Hindenburg released a report on Dozy Mmobuosi's Tingo Group, where they accused the company of vast amounts of fraud, including misrepresentation of the founder's educational credentials and the existence of many aspects of the business. The report questioned the legitimacy of the company's financial reports and alleged that many of Tingo's claimed partners were not in fact partnered with Tingo.[59] NASDAQ-listed shares in Tingo Group plunged in value after the report.[60][61] The company denied the Hindenburg claims, which it said contained "errors of fact" and "misleading and libellous content",[62] and appointed lawyers White & Case to review the claims.[63]

In August 2023, Hindenburg released a report on Freedom Holding, leading to an investigation by the Department of Justice.[64] In August 2024, Hindenburg disclosed a short position in Supermicro, alleging accounting failures ("red flags").[65] The next day, Supermicro said it would delay the filing of the annual report, causing its stock to collapse over 25%.[66] The U.S. Department of Justice opened a preliminary probe into the company a month after the report, according to The Wall Street Journal.[67] In October 2024, Supermicro's auditors, Ernst & Young resigned after raising significant concerns over the company's internal controls, board independence and accounting practices, which led the company to lose a third of its market value.[68]

## Other activities

[edit]

In October 2021, Hindenburg announced a $1 million reward for information on how the Tether cryptocurrency is pegged to the U.S. dollar and for knowledge on Tether's deposits. Hindenburg included that, at the time, they did not own positions in any cryptocurrency.[69]

In May 2022, Hindenburg took a short position in Twitter, Inc. following the announcement of its acquisition of Twitter by Elon Musk. After Musk's attempted termination of the deal, Hindenburg took a significant long position on Twitter, betting against Musk on the acquisition to close.[3]

## See also

[edit]

* Muddy Waters Research

## References

[edit]

1. ^ Anderson, Nathan (15 January 2025). "A Personal Note From Our Founder".
2. ^ a b c Warner, Bernhard (3 December 2020). "Little Big Shorts: How tiny 'activist' firms became sheriffs in the stock market's Wild West". Fortune. Retrieved 2021-02-07.
3. ^ a b Mandl, Carolina (27 January 2023). "Explainer: Who is behind Hindenburg, the company that is shorting Adani?". Reuters.
4. ^ Ludlow, Edward; Burton, Katherine (26 January 2023). "Hindenburg vs Adani: The Short Seller Taking on Asia's Richest Person". Bloomberg.com. Retrieved 26 January 2023.
5. ^ "About us". hindenburgresearch.com. 19 October 2018. Retrieved 25 March 2021. "We view the Hindenburg as the epitome of a 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."
6. ^ "'They'd Find company, company, company.'". Institutional Investor. 22 July 2020. Retrieved 2021-02-07.
7. ^ "Super Micro Stock Falls as August Selloff Steepens. A Short-Seller Report Is the Latest Bad News". Barrons. 28 August 2024. Retrieved 2024-08-28.
8. ^ a b "Short seller Hindenburg Research renews attack on Nikola (Update)". FreightWaves. 2020-09-15. Retrieved 2021-02-07.
9. ^ a b "Hindenburg Research Goes After 'Wall Street Celebrity Promoter' Chamath Palihapitiya". Institutional Investor. 4 February 2021. Retrieved 2021-02-07.
10. ^ Michael J. de la Merced (23 March 2023). "Short Seller Accuses Jack Dorsey's Block of Facilitating Fraud". The New York Times.
11. ^ GmbH, finanzen net. "Chinese automaker Kandi plunges nearly 30% after short-seller Hindenburg accused it of fabricating sales to raise $160 million from US investors". markets.businessinsider.com. Retrieved 2021-02-07.
12. ^ "Lordstown Motors' shares slump after Hindenburg takes short position". www.reuters.com. 2021-03-12. Retrieved 2021-03-12.
13. ^ "Hindenburg Research Launches Defense of Short Selling". Morning Brew. Retrieved 2021-02-07.
14. ^ "A Personal Note From Our Founder – Hindenburg Research". 2025-01-15. Retrieved 2025-01-15.
15. ^ Foldy, Ben. "Wall Street's Pre-Eminent Short Seller Is Calling It Quits". The Wall Street Journal. Retrieved 2025-01-15.
16. ^ Thakurta, Paranjoy Guha (2025-01-24). "Hindenburg Research Shut Down: Inside Story of the Short-Seller that Exposed Adani Group". Frontline. Retrieved 2025-05-28.
17. ^ Pound, Jesse (2025-01-15). "Hindenburg Research founder says he's closing short-seller research shop". CNBC. Retrieved 2025-05-28.
18. ^ "Famed Short Seller Hindenburg Research Is Closing Shop". Institutional Investor. 2025-01-16. Retrieved 2025-02-14.
19. ^ "Carvana: A Father-Son Accounting Grift For The Ages – Hindenburg Research". 2025-01-02. Retrieved 2025-02-14.
20. ^ Rice, Andrew (2022-01-20). "The Money Game | Last Sane Man on Wall Street". Intelligencer. Retrieved 2023-01-25.
21. ^ Goldstein, Matthew; Kelly, Kate (16 August 2021). "A Skeptical Stock Analyst Wins Big by Seeking Out Frauds". The New York Times. Retrieved 26 January 2023.
22. ^ a b Smith, Howard (2020-11-10). "Nikola Reveals SEC and Justice Department Subpoenas in September". The Motley Fool. Retrieved 2021-02-07.
23. ^ Boudette, Neal E.; Ewing, Jack (2020-09-21). "Head of Nikola, a G.M. Electric Truck Partner, Quits Amid Fraud Claims". The New York Times. ISSN 0362-4331. Retrieved 2021-02-07.
24. ^ Rosevear, John (14 October 2022). "Nikola founder Trevor Milton found guilty of fraud over statements he made while CEO of the EV company". CNBC. Retrieved 2022-10-14.
25. ^ Bagalkote, Kaustubh. "Nikola, Once A $30 Billion EV Sensation, Struggles To Survive After Hindenburg Fallout And Mounting Losses - Ford Motor (NYSE:F), Nikola (NASDAQ:NKLA)". Benzinga. Retrieved 2025-02-09.
26. ^ Feiner, Lauren (2021-02-04). "Palihapitiya-backed Clover Health shares fall on critical report by short seller Hindenburg Research". CNBC. Retrieved 2021-02-07.
27. ^ Kovach, Steve (2021-02-05). "Chamath Palihapitiya-backed Clover Health gets notice of SEC investigation". CNBC. Retrieved 2021-02-07.
28. ^ Hindenburg Research (24 January 2023). "Adani Group: how the world's 3rd richest man is pulling the largest con in corporate history". Hindenburg Research. New York, USA. Retrieved 2023-01-27.
29. ^ Thomas, Chris; Kalra, Aditya (25 January 2022). "Hindenburg shorts India's Adani citing debt, accounting concerns; shares plunge". Reuters. Retrieved 25 January 2023.
30. ^ Sorkin, Andrew Ross; Mattu, Ravi; Warner, Bernhard; Kessler, Sarah; de la Merced, Michael J.; Hirsch, Lauren; Livni, Ephrat (25 January 2023). "A Short Seller Takes Aim at an Indian Corporate Giant". The New York Times. Retrieved 25 January 2023.
31. ^ Lockett, Hudson (25 January 2023). "Adani shares take $10.8bn hit after Hindenburg bets against group". Financial Times. Retrieved 25 January 2023.
32. ^ Neate, Rupert (25 January 2023). "Adani Group firms lose $9bn in value amid short-seller claims". The Guardian. London, United Kingdom. ISSN 0261-3077. Retrieved 2023-01-27.
33. ^ Barrett, Jonathan (27 January 2023). "US activist investor who accused Adani of 'biggest con in corporate history' dares Indian group to sue". The Guardian. London, United Kingdom. ISSN 0261-3077. Retrieved 2023-01-27.
34. ^ Morrow, Allison (2023-01-30). "Why a tiny American firm is taking aim at an Indian conglomerate". CNN. Retrieved 2023-05-31.
35. ^ Sorkin, Andrew Ross; Mattu, Ravi; Warner, Bernhard; Kessler, Sarah; de la Merced, Michael J.; Hirsch, Lauren; Livni, Ephrat (2023-01-25). "A Short Seller Takes Aim at an Indian Corporate Giant". The New York Times. Retrieved 2023-05-31.
36. ^ "India's Enron Moment? Gautam Adani slips to No. 30, group stocks lose ₹12 lakh crore in 1 month". The Hindu. PTI. 2023-02-26. Retrieved 2023-05-31.
37. ^ Barrett, Jonathan (2023-01-30). "Adani claims US investment firm's fraud allegations are an 'attack on India'". The Guardian. Retrieved 2023-05-31.
38. ^ Barrett, Jonathan (2023-01-27). "US activist investor who accused Adani of 'biggest con in corporate history' dares Indian group to sue". The Guardian. Retrieved 2023-05-31.
39. ^ "Moody's Downgrades Ratings Outlook of Four Adani Group Firms". The Wire. 2023-02-11. Retrieved 2023-05-31.
40. ^ "Hindenburg report impact. Credit Suisse's wealth unit halts margin loans on Adani debt". Business Line. 2023-02-01. Retrieved 2023-05-31.
41. ^ Modak, Samie (July 3, 2024). "Sebi issues showcause notices to Hindenburg Research, five others". Business Standard.
42. ^ "Whistleblower Documents Reveal SEBI's Chairperson Had Stake In Obscure Offshore Entities Used In Adani Money Siphoning Scandal – Hindenburg Research". Hindenburg Research. 2024-08-10. Retrieved 2024-08-10.
43. ^ "SEBI chief Madhabi Buch, husband deny Hindenburg charge as 'baseless'; Adani Group says allegations 'malicious, mischievous'". The Hindu. 2024-08-10. ISSN 0971-751X. Retrieved 2024-08-11.
44. ^ "Sebi chief, husband reject Hindenburg allegations: 'Our life and finances are an open book'". The Times of India. 2024-08-11. ISSN 0971-8257. Retrieved 2024-08-11.
45. ^ "Hindenburg takes aim at Dorsey's payments firm Block, shares plunge". Reuters. March 23, 2023. Retrieved May 12, 2023.
46. ^ de la Merced, Michael J. (March 23, 2023). "Short Seller Accuses Jack Dorsey's Block of Facilitating Fraud". The New York Times.
47. ^ Goswami, Rohan; Sigalos, MacKenzie (March 23, 2023). "Block shares plunge 19% after short seller Hindenburg says Jack Dorsey's company facilitates fraud". CNBC. Retrieved March 23, 2023.
48. ^ Morgenson, Gretchen (May 1, 2024). "Federal prosecutors are examining financial transactions at Block, owner of Cash App and Square". NBC News.
49. ^ Roddan, Michael (2024-11-08). "Block Discloses New Money Laundering Probe". The Information. Retrieved 2024-11-09.
50. ^ Block, Inc. (2024-11-07). "Form 10-Q for the quarterly period ended September 30, 2024". United States Securities And Exchange Commission. Retrieved 2024-11-09.
51. ^ "Icahn Enterprises L.P. (IEP) Stock Price, News, Quote & History - Yahoo Finance". finance.yahoo.com. Retrieved 6 June 2023.
52. ^ Lipschultz, Bailey (2 May 2023). "Icahn Enterprises' Plunge Just One of Short-Seller Hindenburg's Many Big Hits". Bloomberg.com. Retrieved 2 May 2023.
53. ^ Pound, Jesse (2021-06-15). "DraftKings stock falls after Hindenburg Research reveals short position". CNBC. Retrieved 2021-06-21.
54. ^ "Ormat shares drop after short-seller Hindenburg attacks energy company". Reuters. 2021-03-01. Retrieved 2021-03-02.
55. ^ "MULN stock falls further after negative Hindenburg report". FXStreet. 8 April 2022. Retrieved 2022-04-27.
56. ^ "Short-sellers take aim at Chinese blockchain firm SOS, shares tumble". Yahoo Finance. 26 February 2021. Retrieved 2021-03-02.
57. ^ "Block: How Inflated User Metrics and "Frictionless" Fraud Facilitation Enabled Insiders To Cash Out Over $1 Billion". Hindenburg Research. 2023-03-23. Retrieved 2023-03-23.
58. ^ Goswami, Rohan; Sigalos, MacKenzie (2023-03-23). "Block shares plunge 19% after short seller Hindenburg says Jack Dorsey's company facilitates fraud". CNBC. Retrieved 2023-03-23.
59. ^ "Tingo Group: Fake Farmers, Phones, and Financials—The Nigerian Empire That Isn't". Hindenburg Research. 6 June 2023.
60. ^ Quinio, Akila; Adeoye, Aanu; Kerr, Simeon (6 June 2023). "Shares in fintech Tingo slump after Hindenburg takes short position". Financial Times. Retrieved 24 July 2023.
61. ^ "Tingo Group, Inc. (TIO) Stock Price, News, Quote & History - Yahoo Finance". finance.yahoo.com. Retrieved 6 June 2023.
62. ^ Whitehouse, David (12 June 2023). "Nasdaq-listed Tingo denies 'scam' claims from short-seller Hindenburg Research". Africa Report. Retrieved 24 July 2023.
63. ^ "Tingo Group Engages Independent Counsel to Conduct Review of Assertions Made in Short-Seller Report". Yahoo Finance. 8 June 2023. Retrieved 24 July 2023.
64. ^ Goswami, Rohan (2023-10-06). "Kazakh fintech Freedom Holding is being investigated by DOJ, SEC, documents show". CNBC. Retrieved 2024-09-14.
65. ^ Linnane, Ciara; Rogers, James (27 August 2024). "Super Micro's stock slides after short seller Hindenburg alleges accounting red flags in new report". MarketWatch.
66. ^ Seal, Dean (28 August 2024). "Super Micro Computer Selloff Deepens on Delayed 10-K Filing". The Wall Street Journal.
67. ^ Weil, Jonathan; Foldy, Ben (September 26, 2024). "Justice Department Probes Server Maker Super Micro Computer". The Wall Street Journal. Archived from the original on September 27, 2024.
68. ^ Goswami, Rohan (October 30, 2024). "Super Micro shares plunge 33% as auditor resigns after raising concerns months earlier". CNBC.
69. ^ Venkataramakrishnan, Siddharth; Oliver, Joshua; Smith, Robert (2021-10-20). "Short-seller Hindenburg sets $1m 'bounty' for details on Tether's reserves". Financial Times. Retrieved 2021-10-20.

## External links

[edit]

Wikimedia Commons has media related to Hindenburg Research.

* Official website
* Hindenburg Twitter