Hindenburg is back in the headlines after last week accusing Indian conglomerate
Nevertheless, Hindenburg’s scorching allegations have caused the fortune of Adani Group’s founder,
WHAT IS IT?
Hindenburg says it specializes in “forensic financial research.” In layman’s terms, it looks for corruption or fraud in the business world, such as accounting irregularities and bad actors in management.
Hindenburg has even come to be known as Ponzi hunters in some circles, according to the
WHERE DID ITS NAME COME FROM?
The firm says it sees the Hindenburg, the airship that famously caught fire in the 1930s to the cry of “Oh, the humanity,” as the “epitome of a totally man-made, totally avoidable disaster.” It says it looks for similar disasters in financial markets “before they lure in more unsuspecting victims.”
WHO ELSE HAS HINDENBURG GONE AFTER?
It's perhaps most famous for a 2020 report on
Among its allegations, Hindenburg accused
WHAT HAS COME OF SUCH ACCUSATIONS?
For
The company and its founder,
Milton was convicted this past October of charges he deceived investors with exaggerated claims about his company’s progress in producing zero-emission 18-wheel trucks fueled by electricity or hydrogen.
And
WHAT DOES HINDENBURG GET OUT OF THIS?
It can make money. In its Adani report, it said that it had taken a “short position in Adani Group Companies” through bonds that trade in the
It has made similar “short” bets against other companies it published unflattering reports on. A “short” trade is a way for someone to make money if an investment's price falls. Afterward, if the price of a company's stock or bonds falls because of the negative attention from the report, Hindenburg can profit.
Such short sellers have been criticized for unfairly pushing down prices of stocks with potentially unfounded allegations. But proponents also call them a healthy part of a stock market, keeping stock prices in check and preventing them from running too high.
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