Nate Anderson, the founder of US-based short seller Hindenburg Research, whose scathing report on Adani group in January 2023 triggered a $150 billion rout in group shares, said he has made the decision to disband his research team. In a letter, he said the plan has been to wind up after his team finishes the pipeline of ideas that they were working on.
"And as of the last Ponzi cases we just completed and are sharing with regulators, that day is today," he said.
Anderson said there is not one specific reason behind his decision to wind up the research firm -- no particular threat, no health issue, and no big personal issue.
He said someone once told him that at a certain point a successful career becomes a selfish act. Early on, he said, he felt he needed to prove some things to himself. But the intensity and focus has come at the cost of missing a lot of the rest of the world and the people Anderson said he cares about. "I now view Hindenburg as a chapter in my life, not a central thing that defines me," he said.
Anderson said over the next six months, he plans to work on a series of materials and videos to open-source every aspect of his model and how his team conducts its investigations.
In the note, Anderson said his team of 11 worked extremely hard, with a focus on precision and letting the evidence dictate words. Sometimes this meant taking big swings and taking on fights that are much bigger than any of us as individuals.
"Fraud, corruption, and negativity often seem overwhelming. Early on, a sense of justice was usually elusive. When it happened, it was tremendously fulfilling. It kept us going when we needed it," he said.
"And boy did we have an impact, eventually— more than I imagined was possible at the outset. Nearly 100 individuals have been charged civilly or criminally by regulators at least in part through our work, including billionaires and oligarchs. We shook some empires that we felt needed shaking," he said without naming anyone.
Hindenburg's report on the Adani group hit fortunes of Gautam Adani hard. Adani's worth stood at $150 billion in September 2022. But the Hindenburg Research allegations jolted group shares, eroding Adani's personal wealth by over $100 billion. Following the report in January 2023, the market capitalisation of 10-listed Adani group companies fell to sub-Rs 7 lakh crore level by February 27, off January 24’s m-cap of Rs 19,19,888 lakh crore. The Adani stocks though recovered eventually. Later, the Supreme Court gave a clean chit to the Adani group, saying the report by the OCCRP or any third party organisation, without any verification, cannot be relied upon as a proof.
Hindenburg had in the past had a few successful shorts. In September 2020, it made short positions in electric vehicle company Nikola and talked about lies and deceptions by Nikola in the years leading up to its proposed partnership with General Motors. Nikola Founder and Executive Chairman Trevor Milton promptly resigned from the company.
It is the same short-seller, which in June 2019 had alleged that NYSE-listed Eros International's auditor, Grant Thornton, failed to apply even basic scrutiny to Eros’ financials, and said “the price of both the BSE and NYSE stock (of the company) would end up worthless".
For now, Anderson said he will be focused on making sure everyone on his team lands where they want to be next.
"Some are going to start their own research firm, which I will strongly and publicly encourage, even as I will have no personal involvement. There are others on our team who are now free agents—so feel free to reach out to me if you have a need for anyone who is brilliant, focused, and easy to work with, as they all are," he said.
Another famous short-seller Jim Chanos, best-known for his bets against energy trader Enron, closed his hedge fund in 2023 after 38 years, saying its business model had come under pressure.