By Anita Hamilton
A short seller and research firm specializing in forensic financial research announced Wednesday that it was closing up shop.
In a note posted to the Hindenburg Research's website, founder Nate Anderson wrote, "The intensity and focus has come at the cost of missing a lot of the rest of the world and the people I care about. I now view Hindenburg as a chapter in my life, not a central thing that defines me."
His company focused on finding accounting irregularities, "bad actors," unethical business and undisclosed regulatory, product, or financial issues. Some recent, and critical, reports by the firm have focused on vehicle seller Carvana, the online gaming platform Roblox, and AI server firm Super Micro. Hindenburg said it shorted the shares of these companies before publishing its reports on them.
Short selling is a bet that a stock will fall. The trader borrows the stock, sells it and buys it back later at the new price. If the trader was correct, the short-sale would be profitable after repaying the loaned stock.
The practice isn't without controversy. Many executives of firms that are targeted by short sellers push back, especially when the short seller's views are shared in a public manner. The activist investor Carl Icahn, known for taking stakes in companies and then engaging them publicly to make changes, had a bitter battle with Hindenburg, which accused his company Icahn Enterprises in 2023 of having a " Ponzi-like" economic structure.
Icahn Enterprise shareholders sued the company after the Hindenburg report came out, but the case was dismissed in September. The company has called the claims "meritless."
Anderson wrote in his note on Wednesday that over the next six months he plans to "open-source every aspect of our model and how we conduct our investigations."
Write to Anita Hamilton at anita.hamilton@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 15, 2025 17:58 ET (22:58 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Comments