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Activist short seller Nathan Anderson, famous for his campaigns against Adani Group, Super Micro and Nikola, is closing his company Hindenburg Research seven years after it was founded.
“The plan was to wrap up after we finished the pipeline of ideas we were working on,” Anderson said. wrote in a statement. He described the work as “rather intense and sometimes all-encompassing.”
Anderson had become one of Wall Street’s most high-profile activist short sellers, known for his meticulously detailed reporting and relentless pursuit of companies he accused of committing fraud.
Its rise came at a time when many peers were losing steam, handicapped by a decade-long bull market and the growth of passive investment funds that made it difficult to buck the tide.
Famed short seller Jim Chanos has told investors he will close his short-targeted funds in November 2023 after more than three decades in the industry, while Bill Ackman, famous for a costly campaign against Herbalife, has given up entirely this practice.
Activist short selling is a notoriously difficult activity that is generally shunned by major Wall Street institutions. Smaller players tend to resort to balance sheet agreements with their partners hedge funds and get a fee reduction, but they are the face of public campaigns.
Hindenburg worked with a small New York-based company called Kingdon Capital on a number of his exchanges.
This practice can also have serious legal consequences. Last year, U.S. regulators charged Andrew Left, a short seller who founded Citron Research, with fraud for alleged market manipulation. He has pleaded not guilty and the trial is scheduled for September.
Despite all the challenges, proponents view short sellers as necessary to balance market euphoria.
Hindenburg was prolific, often targeting several large companies at once, a level of intensity that appears to have become too much for Anderson. “This came at the cost of losing much of the rest of the world and the people I hold dear,” he wrote in a letter published Wednesday. “It wasn’t always obvious to me, but I now see it all as a love story.”
The last report released by Hindenburg was from earlier this year and focused on online auto retailer Carvana.
Anderson rose to fame with a report against the electric truck company Nikola, at the time a darling of the boom in companies going public through shell companies known as special purpose acquisition companies.
The report included the now-infamous video of a truck rolling downhill and led to founder Trevor Milton’s fraud conviction as well as a $125 million fine paid by the company.
The case attracted enormous media attention and earned Anderson a large following who eagerly awaited the Hindenburg reports and speculated about his next potential targets.
Hindenburg’s research led to fraud accusations and indictments against dozens of people, according to his website, but also resulted in costly legal battles. The company had only 11 employees.
Hindenburg also relied on unconventional research methods.
When looking into an alleged Ponzi scheme in 2022, she outfitted a private jet with equipment to secretly record a company representative giving a speech to a Hindenburg employee.
Anderson got his start investigating corporate misconduct by targeting hedge funds. In 2014, he filed his first whistleblower report with the U.S. Securities and Exchange Commission, according to Hindenburg’s website.
Anderson took on some of Wall Street’s most famous investors, including fellow activist Carl Icahn. A report published by Hindenburg in 2023 on Icahn Enterprises shares sent in the business down 20 percent and forced the billionaire to restructure his personal loans.
“We have all worked extremely hard, emphasizing accuracy and letting the evidence dictate our words,” Anderson wrote in Wednesday’s announcement. “Sometimes that meant making big decisions and taking on battles that were bigger than each of us as individuals. »
Anderson’s parting gift to his subscribers was a YouTube link to a DJ set performed in Bali. “It had a big impact on me at a pivotal time,” he wrote.
