Five years ago, people barely knew Nathan Anderson, a man living in a small Manhattan apartment that he could barely afford. But he had an unusual talent for sniffing out corporate fraud, which has now week landed him in a showdown with one of the world¡¯s richest men and his business empire.
Last week, Anderson made waves when his firm, Hindenburg Research, announced that it was betting against stocks linked to the Adani Group, headed by Gautam Adani, a man whose estimated net worth at the start of this year exceeded that of billionaires Jeff Bezos, Bill Gates and Warren Buffett.
Nathan Anderson, who graduated from the University of Connecticut with a degree in international business, started his career in finance at data company FactSet Research Systems Inc, where he worked with investment management companies.
"I realized they were doing a lot of run-of-the-mill analysis, there was a lot of conformity," he had told the Wall Street Journal (WSJ) in 2020. He also did a brief earlier stint as an ambulance driver in Israel, as per Reuters.
The short-seller says on his LinkedIn page that it gave him "experience thinking and acting under extreme pressure." Anderson has said in interviews that Harry Markopolos, an analyst who first flagged Bernie Madoff's fraud scheme, is his role model.
Nathan Anderson founded Hindenburg Research in 2017, as a forensic financial research firm which analyses equity, credit and derivatives. On its website, Hindenburg says it looks for "man-made disasters," such as accounting irregularities, mismanagement and undisclosed related-party transactions. The company invests its own capital.
It was named after the high profile disaster of the Hindenburg airship in 1937 which ignited as it flew into New Jersey. After finding potential wrongdoings, Hindenburg usually publishes a report explaining the case and bets against the target company, hoping to make a profit.
Hindenburg is best known for its bet against electric truck maker Nikola Corp (NKLA.O) in September 2020, which generated "a big win," he told the WSJ, declining to specify the amount.
As per Reuters, the short-seller said Nikola deceived investors about its technological developments. Anderson challenged a video Nikola produced showing its electric truck cruising at high speed - in fact, the vehicle was rolled down a hill.
A U.S. jury convicted Nikola's founder Trevor Milton, Nikola's founder last year of fraud over allegations he lied to investors. The company agreed in 2021 to pay $125 million to settle with the U.S. Securities and Exchange Commission over its representations to investors. Nikola debuted as a listed company in June 2020 and its valuation reached $34 billion some days after, surpassing Ford Motor (F.N). Now, it is worth $1.34 billion. Hindenburg says whistle-blowers and former employees helped it with findings.
Hindenburg has flagged potential wrongdoing in at least 16 companies since 2017, according to its website, the report mentions.?
Last year, it took a short and then a long position in Twitter Inc. In May, Hindenburg said it was short because it believed that Elon Musk's $44-billion offer to take the company private could get repriced lower if the world's richest person walked away from the deal. In July, Anderson disclosed a "significant long position," betting against Musk. The deal for Twitter closed in October at the original price.
On January 24th last week,?Hindenburg came out with its report mentioning that it has uncovered?evidence of accounting fraud, stock manipulation, and money laundering?at Adani Group that took place over the course of decades. As per the research, Adani has pulled off this gargantuan feat with the help of enablers in government and a cottage industry of international companies that facilitate these activities.
Hindenburg mentioned that based on its research, it has?taken a short position in Adani Group Companies?through U.S.-traded bonds and non-Indian-traded derivative instruments. It has accused the Adani Group of accounting fraud, stock manipulations, and money laundering. Since then, Adani group's stocks have been bleeding heavily, and the business empire's head Gautam Adani has been continuously falling the ranks in the list of the world's richest people.
Adani Group and Hindenburg have been issuing back-to-back statements against each other ever since the report came out last week.
Let us have a look at what Hindenburg Research and Adani Group have so far said regarding the allegations put forth in the report.
For the latest and interesting financial news, keep reading Indiatimes Worth.?Click here.