Hindenburg Research, a research and investment firm known for successful short bets, is shutting down, as announced by founder Nate Anderson on Wednesday. Anderson stated on the firm’s website that he had decided to disband Hindenburg Research after completing their pipeline of ideas, with the completion of the recent Ponzi cases being the final step.
Established in 2017 by Anderson, Hindenburg has released negative research reports on numerous companies over the years. One of its notable reports in 2020 targeted vehicle startup Nikola, revealing allegations of falsified autonomous truck capabilities in a video, which Nikola later admitted. Nikola’s founder, Trevor Milton, was subsequently sentenced to four years in prison.
Hindenburg’s reports often targeted smaller companies, but also scrutinized the businesses of prominent financial figures like Carl Icahn’s Icahn Enterprises LP and Indian billionaire Gautam Adani’s empire. The firm’s most recent report, published on Jan. 2, focused on auto retailer Carvana, labeling it a “father-son accounting grift for the ages.” Carvana dismissed the report as “intentionally misleading and inaccurate,” leading to an initial stock drop of over 11%, which later recovered.
Operating as both a short seller and a research house, Hindenburg profited from betting against the companies it investigated. The firm’s reputation caused immediate stock declines for some companies following the release of its reports, although the exact profits from its short bets remain undisclosed.
Hindenburg’s success coincided with a decline in short selling’s popularity due to the meme-stock phenomenon of 2021, which saw retail investors challenging hedge funds. Federal authorities have also scrutinized short sellers, such as the Department of Justice charging Citron’s Andrew Left with securities fraud last year.
