Factbox: Hindenburg's short bets that shook markets

Sezzle

16/01/2025 15:07

By Lisa Pauline Mattackal
       Jan 16 (Reuters) - Hindenburg Research's founder Nathan
Anderson announced on Wednesday he would disband the firm whose
short reports on companies typically led to sharp plunges in the
stock prices, and in some cases, investigations by authorities. 
    The firm bet against publicly listed companies they believed
had accounting issues, was being mismanaged or committing fraud,
typically following a long period of investigation. The firm
would then publicly release those findings. 
    Here are some of Hindenburg's most notable shorts and how
the companies have fared since: 
    
    ADANI GROUP 
    Adani Group is perhaps Hindenburg's most famous target,
helmed by Gautam Adani who is one of the world's richest men. 
    Hindenburg accused the Indian conglomerate of stock
manipulation and accounting fraud on Jan. 24, 2023 after what it
said was a two-year investigation. The Adani Group called the
report baseless. 
    Shares of Adani's publicly listed companies plummeted
following the report, losing billions in market value and
eventually leading to India's Supreme Court asking market
regulator Securities and Exchange Board of India to probe the
allegations. 
    The regulator's probe found there was no evident pattern of
manipulative contribution to the stock's rise. 
    In a follow up report on Aug. 10, 2024, Hindenburg alleged
the head of SEBI previously held investments in offshore funds
also used by the Adani Group. 
    Shares of several of Adani's companies have yet to regain
the ground they lost after the report. Since Jan. 24, 2023,
Adani Energy Solutions  ADAI.NS  is down 71.32%, Adani Total Gas
 ADAG.NS  has lost 82.7%, and flagship Adani Enterprises
 ADEL.NS  is down about 30%. 
    Adani Ports  APSE.NS  and Adani Power  ADAN.NS  are up about
51% and 105%, respectively, since the report. 
    U.S. prosecutors indicted Gautam Adani in November over an
alleged scheme to pay hundreds of millions of dollars in bribes
and conceal the scheme from investors. 
    Adani was the world's third richest person at the time of
the original Hindenburg report, according to Forbes, but has
since slipped to 25th. 
    
    NIKOLA 
    Hindenburg's short of U.S.-based electric truck maker Nikola
 NKLA.O  in September 2020 is one of its best-known short bets.
The firm alleged Nikola and its founder, Trevor Milton, were
misleading investors about its battery technology and vehicle
design. 
    One statement challenged a Nikola promotional video which
showed its truck cruising at high speed, when in fact the
vehicle was rolling down a hill. 
    Milton stepped down as executive chairman a few weeks after
the report was released. He was convicted of fraud by a U.S.
jury in 2022 over allegations he lied to investors. 
    Nikola shares now trade at just $1.23, down over 99% since
the report's release. 
    
    ICAHN ENTERPRISES 
    Hindenburg accused billionaire investor Carl Icahn's Icahn
Enterprises LP  IEP.O  of running a "Ponzi-like" scheme to pay
dividends, and raised questions about Icahn's margin borrowing. 
    Icahn later agreed to pay $2 million in penalties in a
settlement with U.S. regulators, after a probe which he said was
sparked by Hindenburg's allegations. 
    Icahn said the outcome allowed him to put to rest
Hindenburg's "scurrilous and unsupported" accusations.
    Since the report's release on May 2, 2023, shares of Icahn
Enterprises are down nearly 82%. 
        
    LORDSTOWN MOTORS
    Electric truck maker Lordstown Motors appeared on
Hindenburg's radar in March 2021, after the short seller claimed
the company had misled investors on its product's demand. 
    The company's CEO Stephen Burns stepped down a few months
after the report, as an investigation by its board found most of
its stated 100,000 commercial fleet preorders were from
intermediaries that had agreed to find buyers for the trucks. 
    The company later settled with the SEC over claims it had
misled investors. It filed for bankruptcy in 2023. 
    
    Other notable Hindenburg shorts and their stock performance
since the report: 
                                    
 Company          Hindenburg        Stock
                  Report Date       performance 
                                    
 Carvana          January 2, 2025           7.20%
 Sezzle           December 18,            -17.70%
                  2024              
 Roblox           October 8, 2024             54%
 Block Inc        March 23, 2023           16.60%
 DraftKings       June 15, 2021           -23.60%
 Riot Platforms   December 11,2017           -15%
 Super Micro      August  27, 2024        -44.80%
 Computer                           
 
 (Reporting by Lisa Mattackal in Bengaluru; Editing by Krishna
Chandra Eluri)
 ((bangalore.newsroom@thomsonreuters.com))