What happened to Hindenburg Research?
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Check out public.com slash morningbrew and get some alpha from Alpha. Paid for by Public Investing. Full disclosures in podcast description. Our first story goes out to all the short kings out there, and I'm not just talking about height.
Nate Anderson, the man behind the famed short-selling firm Hindenburg Research, tossed in the towel saying he was closing his firm due to the stresses of the job.
Hindenburg made a name for itself by going after the giants of the corporate world, including the Indian conglomerate Adani Group, the once high-flying hydrogen truck startup Nikola, and household names like Carvana, Icon Enterprises, and Jack Dorsey-owned Block. Between Block, Adani Group, and Icon Enterprises...
Hindenburg's deeply researched reports knocked as much as $173 billion off their market value. It's not easy to destroy that much value amidst one of the best bull runs U.S. equities have seen in decades, but Hindenburg's approach created a loyal following that allowed it to punch above its weight. Not all of its shots hit its target, though.
Since publishing a report about Roblox in October, the children's game platform has seen its stock rise 50%, and shares of its most recent target, Carvana, have recovered and are up about 5% this month.
Still, it's going to be weird living in a world without a Hindenburg report randomly dropping from the clouds and causing a ruckus kneel and shows that activist short sellers are increasingly becoming a dying breed.
So our first thought when this news hit the wires on Wednesday was that financial regulators are knocking at his door because short selling is not for the weak stomach. He launched this firm in 2017 and immediately was sued by three of the firms that he was targeting. There are legal challenges facing other short sellers as well.
Andrew Left, who's a very prominent short seller, is now was indicted for manipulating stock. So I'm not speculating at all. It's just this is the first thing that came to everyone's mind here at Morning Brew because short sellers are operating in a legal gray area. And many of them have just hung up the cleats in recent years because they say it's not worth it.
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