Shutting down
One of Wall Street’s most famous short sellers is calling it quits. Hindenburg Research attributed the decision to a career that “has come at the cost of missing a lot of the rest of the world and the people I care about,” though it has been increasingly difficult to be a short seller in the current environment. One doesn’t have to look far to Jim Chanos and Citron Capital’s Andrew Left, who have hung up their boots or been targeted by regulatory probes and lawsuits in recent years (don’t forget Bill Ackman).
Resume: Hindenburg has been behind some notable calls during its seven years in the business. The firm’s reports have covered companies from Nikola (NKLA) and Icahn Enterprises (IEP) to Super Micro Computer (SMCI) and Roblox (RBLX) – which have seen the departures of executives and fines – and even bankruptcies at Lordstown Motors (OTCPK:NRDE) and SmileDirectClub. Hindenburg also didn’t limit its research to the U.S., going after global targets, like India’s powerful Adani Group in 2023.
The art of short-selling research seeks to identify market manipulation, unethical practices, and accounting fraud. “Boy did we have an impact,” Hindenburg founder Nate Anderson wrote in a letter. “Nearly 100 individuals have been charged civilly or criminally by regulators at least in part through our work, including billionaires and oligarchs.” Many companies that are targeted see huge drops in their stock, though others are dismissed and see share price recoveries, like the campaign against Carvana (CVNA) earlier this month.
Some of Anderson’s beginnings in short selling started on Seeking Alpha, where he would post his research and first used the name Hindenburg. It was a reference to the 1937 disaster and “similar man-made disasters floating around in the market.” Anderson now plans to release material and videos on how to conduct investigations, which can cater to the next generation of analysts who want to learn the craft and embrace the same passion.
From the SA comments section: “It is very disturbing to see short sellers being pressured out of business by gov’t as they bring a necessary and useful element of accountability to the markets,” writes Guiley. “Really hope some other firms step up and play the role that Hindenburg did,” adds Zen345, though Austin Craig feels, “they can receive good tips at times, but they also write blatant hit pieces too.” (53 comments)
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