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Activist short-seller Nathan Anderson, known for his campaigns against Adani Group, Super Micro and Nikola, is closing his firm Hindenburg Research seven years after founding it.
“The plan was to finalize it after we finished the pipeline of ideas we were working on,” Anderson said. wrote in the statement. He described the work as “rather intense and at times all-encompassing.”
Anderson became one of Wall Street’s best-known activist short-sellers, known for his meticulously detailed reports and relentless pursuit of companies he alleged were committing fraud.
His rise comes at a time when many of his peers are losing steam, as a decade-long bull market and the growth of passive investment funds have made it difficult to reverse.
Renowned short-seller Jim Chanos told investors he would close his short-term focused fund in November 2023 after more than 30 years in the industry, while Bill Ackman, known for his expensive campaigns against Herbalife, Bill Ackman put an end to this practice altogether.
Activist short selling is a notoriously difficult business that large Wall Street institutions generally avoid. Smaller players tend to use their balance sheets with partner hedge funds and cut fees, but this is the face of public campaigns.
Hindenburg worked with a small New York-based firm called Kingdon Capital on several deals.
This practice can also be legally problematic. Last year, U.S. regulators charged short-seller Andrew Left, who founded Citron Research, with fraud for alleged market manipulation. He pleaded not guilty and his trial was scheduled for September.
Despite all the difficulties, supporters believe short selling is necessary to balance market euphoria.
Hindenburg often targeted several large companies simultaneously, a level of intensity that was too much for Anderson. “It has come at the cost of missing much of the world and the people I care about,” he wrote in a letter released Wednesday. “It wasn’t always obvious, but now I see this whole thing as a love story.”
Hindenburg’s last report came out earlier this year and focused on online car retailer Carvana.
Anderson gained notoriety for his reports on electric truck company Nikola. At the time, there was a boom in companies going public through shell companies, known as special purpose acquisition companies.
The report included the now-infamous video of the truck rolling downhill, which led to founder Trevor Milton’s fraud conviction and a $125 million fine paid by the company.
The incident attracted great media attention and gained Anderson many followers who eagerly anticipated Hindenburg’s report and speculated about his next potential target.
According to the website, Hindenburg’s research has resulted in dozens of individuals being indicted and prosecuted for fraud, but it has also led to costly legal battles. The company had only 11 employees.
Hindenburg also resorted to unconventional research methods.
In 2022, when he was digging into a suspected Ponzi scheme, he fitted a private jet with equipment that could secretly record company representatives giving presentations to Hindenburg employees.
Anderson began targeting hedge funds and investigating corporate misconduct. According to Hindenburg’s website, he filed his first whistleblower report with the U.S. Securities and Exchange Commission in 2014.
Anderson acquired some of Wall Street’s most famous investors, including another activist, Carl Icahn. Hindenburg’s 2023 report on Icahn Enterprises sent the company’s stock down 20% and forced the billionaire to restructure his personal loans.
“We all worked very hard, focusing on accuracy and letting the evidence dictate our words,” Anderson wrote in Wednesday’s release. “Sometimes this meant going through big changes and fighting fights much bigger than ourselves as individuals.”
Anderson’s parting gift to his followers was a YouTube link to a DJ set played in Bali. “It had a profound impact on me at a critical time,” he wrote.
