EXPLAINED : What is Hindenburg Research? As soon as its report is published, why do the shares of companies fall?

• The Hindenburg Research firm was founded in 2017 by its founder Nathan Anderson
• The Hindenburg firm's website clearly states that it monitors 'Man-Made Disasters'

A recent report by an American research firm Hindenburg has caused a huge loss to Gautam Adani, who is the richest in Asia and ranked fourth in the list of the richest in the world. Shares of companies belonging to the Adani Group under the ownership of Gautam Adani have taken a big hit due to this report. Due to this, Adani has also now slipped from 4th to 7th position in the list of top 10 richest people in the world. So let's finally know what is this Hindenburg Research Company and what is its work... why its report is considered so important... know complete information in simple words...

When and who founded the Hindenburg Company?

Hindenburg is an American research firm. It was founded by Nathan Anderson. Anderson, who earned a graduate degree in international business from the University of Connecticut, began his career at FactSet Research Systems Inc., a data company. Here his work was related to investment management companies. He then started his own short-selling firm Hindenburg Research in 2017. Nathan Anderson has previously been an ambulance driver in Israel. He considers a role model Harry Markopoulos who is an analyst and credited for exposing Bernie Madoff's fraud scheme.

Nathan Anderson (Founder of the Hindenburg Company)

What does the Hindenburg do?

Hindenburg is actually a forensic financial research firm that analyzes equity, credit and derivatives. In the Hindenburg Company, a detailed report is prepared and then published on any malpractice in any company. It focuses on aspects like accounting confusion, management level deficiencies and undisclosed related party transactions. He places bets against the target company to make a profit. The Hindenburg firm's website clearly states that it monitors 'Man-Made Disasters'.

How many disclosures has the company made so far?

The Hindenburg Company is named after the Hindenburg airship crash on May 6, 1937 in Manchester Township, New Jersey. So far this company has exposed the alleged irregularities in about 30 companies. His report on Twitter Inc. was heavily discussed. Hindenburg has a track record of all wrongdoing in the corporate world.

The Hindenburg Company makes a profit by short selling to the public

The Hindenburg Company publicly describes itself as an activist short seller. Short selling means triggering a sale in a stock, security or commodity so that its price falls before the delivery time and it can be bought at a lower price. That is, the company publicly targets a company and finds its trouble. Then if his shares fall, he makes a profit by buying them. Regarding Adani Group, Hindenburg said that after our report, shares of Adani Group may fall by up to 85%. After the report came, the company's shares fell by 25% within two days.

In the past, Hindenburg presented reports on these companies

Since 2020, Hindenburg has released as many as 30 reports. If the average report of the stocks of these 30 companies is seen, their shares have fallen by around 15%. While an average of 26% was recorded in 6 months. In the past Hindenburg exposed companies like Nikola Corp, WINS Finance, China Metal Resources Utilization, HF Foods, SC Worx's.

The company's shares fell 94% after the Hindenburg report

A report based on the Nikola company was released in 2020 by Hindenburg Research Firm. After which the shares of this company fell by 94%.

Hindenburg is also being investigated in America

The US Department of Justice is also investigating the Hindenburg Company. He is accused of short selling in association with hedge funds. However, he has already disclosed that he is short position in this company and his investors also take short position. After which the report is issued. The report is also shared with 10 investors before it is published.

Hindenburg's prize reaction track record has been the best

Whenever Hindenburg issued a report, his predictions were also largely correct. Hindenburg's prize reaction track record has also been the best. There was a company called SC WORX, whose shares fell by 3.3 percent a day after the report was released, but after 3 months, the company's shares fell by 90%. When the report against Genius Brand came, the shares of the company fell by 13.4% and within 3 months it was said to be up to 85%. A similar thing happened with Ideanomic's shares. The share price crashed by 40% after the report and in the next 3 months the share price fell by 64%.

What did Hindenburg reveal about Adani Group?

Andersen's research report on Adani Group said that all the companies of Adani Group are in the midst of questions regarding loans. The report claimed that the top 7 companies of the group which are listed in the share market have overvalues ​​of more than 85 percent. In the latest report of Hindenburg Research, 88 questions were raised against Adani Group. However, as soon as the report came, the investor sentiment of the Adani Group companies was affected and the shares of the Adani Group have been falling for three consecutive days. Because of this, Gautam Adani has slipped from the 4th position to the 7th position in the list of the world's richest people. Adani Group's market cap has fallen to 2.37 lakh crore in 2 days. Adani's net worth has also fallen to $100.4 billion.

Major stocks of Adani companies remained like this in 2 days after Hindenburg's disclosure

Cracks in 1 week (in percentage)

• Adani Enterprises Ltd. 20.1%
• Adani Port 22.92%
• Adani Total Gas 25.29%
• Adani Green Energy 24.77%
• Adani Power 9.85%
• Adani Wilmar 6.78%