Nate Anderson on January 6, 2023 in New York. Anderson exposes corporate fraud and ponzi schemes through his company Hindenburg Research.
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Hindenburg Research, an upstart research and investment firm that made a name for itself with several successful short bets, is closing, founder Nate Anderson announced Wednesday.
“As I’ve shared with family, friends and our team since late last year, I have made the decision to disband Hindenburg Research. The plan has been to wind up after we finished the pipeline of ideas we were working on. And as of the last Ponzi cases we just completed and are sharing with regulators, that day is today,” Anderson wrote in a note posted to the firm’s website.
Anderson founded Hindenburg in 2017, and the company has published negative research reports about dozens of companies in the years since. One of Hindenburg’s first high-profile reports came in 2020 and was focused on vehicle startup Nikola. Part of the report included an allegation that Nikola had faked the autonomous capabilities of a semi-truck in a video, which the company later admitted. Nikola founder Trevor Milton was later sentenced to four years in prison.
Many of the targets of Hindenburg’s reports were smaller companies. The firm has also gone after the companies of major financial figures, including Carl Icahn’s Icahn Enterprises LP and the business empire of Indian billionaire Gautam Adani.
The most recent report filed by the company was on Jan. 2 about auto retailer Carvana, which it called a “father-son accounting grift for the ages.” In a statement, Carvana called the firm’s report “intentionally misleading and inaccurate.” The stock fell more than 11% the day after Hindenburg published its report but has since recovered.
Hindenburg was a short seller as well as a research house. This means that the firm was placing bets against the companies it was researching, putting it in position to profit if the stock declined. As Hindenburg’s reputation grew, some stocks saw immediate negative reactions after the reports were published.
It is not clear how much money Hindenburg made from its short bets.
The rise of Hindenburg came at a time when the controversial practice of short selling was falling out of favor elsewhere. The meme-stock craze of 2021 pitted retail investors against hedge funds, causing some professional investors to back away from short selling. Federal officials have also been investigating other short sellers in recent years, including the Department of Justice hitting Citron’s Andrew Left with securities fraud charges last year.