Possible manipulation of Adani Group shares
2023.01.27 08:29
Possible manipulation of Adani Group shares
By Kristina Sobol
Budrigannews.com – Hindenburg Research, a short-seller, disclosed short positions in India’s Adani Group on Wednesday, citing accounting fraud and potential stock manipulation. The allegations caused the conglomerate’s bonds and shares to fall.
Hindenburg has a history of uncovering corporate wrongdoing and betting against it.
Hindenburg Research is a forensic financial research firm that examines equity, credit, and derivatives. It was established in 2017 by Nathan Anderson. According to Hindenburg’s website, it looks for “man-made disasters” like accounting irregularities, poor management, and related-party transactions that have not been disclosed. The business invests its own money.
It was named after the famous 1937 accident in which the Hindenburg airship caught fire as it flew into New Jersey. Hindenburg usually makes bets against the target company and publishes a report explaining the case after discovering potential wrongdoings in the hope of making a profit.
Nathan Anderson, who earned a degree in international business from the University of Connecticut, began his career in finance at the data company FactSet Research Systems Inc., where he worked with investment management firms.
He told the Wall Street Journal (WSJ) in 2020, “I realized they were doing a lot of run-of-the-mill analysis, there was a lot of conformity.” He also worked briefly as an ambulance driver in Israel in the past. On his LinkedIn profile, the short-seller claims that it provided him with “experience thinking and acting under extreme pressure.” In interviews, Anderson has stated that Harry Markopolos, an analyst who identified Bernie Madoff’s fraud scheme for the first time, is his role model.
He told the WSJ that Hindenburg’s bet in September 2020 against Nikola Corp, which resulted in “a big win,” but he did not specify the amount.
According to the short seller, Nikola misled investors regarding its technological advancements. Anderson objected to a video Nikola made that showed its electric truck cruising at high speed while the vehicle was actually rolled down a hill.
Trevor Milton, Nikola’s founder, was found guilty of fraud by a jury in the United States last year after being accused of lying to investors. In 2021, the company agreed to settle with the U.S. Securities and Exchange Commission for $125 million for misleading investors.
Nikola became a publicly traded company in June 2020, and a few days later, its valuation surpassed that of Ford Motor (NYSE:) by $34 billion. It is currently worth $1.34 billion. Hindenburg claims that findings were helped by whistleblowers and former employees.
According to its website, Hindenburg has reported potential wrongdoing in at least 16 businesses since 2017. It first took a short position in Twitter Inc. (NYSE:), and then it went long. Hindenburg said in May that it was short because it thought that if the world’s richest person walked away from the deal, Elon Musk’s $44 billion offer to take the company private could get lowered. Anderson made a “significant long position” against Musk in July. In October, the deal to acquire Twitter was concluded at the initial price.
