The long and SHORT of Hindenburg Research..
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00:00Who is Hindenburg? Has anyone washed it with milk?
00:02Hindenburg's report.
00:03An American short-seller, Hindenburg Research, and they came out with a report...
00:07Hindenburg has come out with fresh allegations in relation to the Adani Group.
00:11But what is this research outfit whose revelations have caused
00:14losses of about 53,000 crore rupees to Adani stocks' investors?
00:18Hindenburg is a forensic financial research firm
00:21that looks for financial flaws and irregularities in companies.
00:25It is relatively small according to the Washington Post,
00:27and at 7 years old, relatively young as well.
00:30It was named after the Hindenburg Airship,
00:33which caught fire and crashed over New Jersey in 1937.
00:37Slowly the big ship warps in and the ground crews rush for the mooring lines.
00:42In another 10 minutes or so, the great aircraft would have been snugly docked.
00:46But as the passengers crowded the windows to watch,
00:49a roar and a burst of inflammable hydrogen gas blazed up in less than a minute.
00:54The About Us tab on the Hindenburg website says that this airship crash,
00:59which claimed 36 lives, was a totally man-made, totally avoidable disaster.
01:04The website says that several hydrogen-based aircraft had crashed
01:08leading up to the tragedy in New Jersey,
01:10and yet the owners of the Hindenburg Airship went ahead with their operation.
01:14The hundreds of tons of fuel oil burns for an hour or more,
01:19with its dense black smoke making a fall over the tragic scene.
01:22The Hindenburg website says,
01:25we look for similar man-made disasters floating around in the market.
01:28They say their goal is to shed light on them
01:31before these companies attract more unsuspecting victims.
01:36A man named Nathan Anderson founded Hindenburg in 2017.
01:39Anderson grew up in a small town in Connecticut,
01:42studied international business at a university there,
01:44and volunteered as an ambulance medic in Jerusalem for some time,
01:48seeking a more diverse set of life experiences, he told the Financial Times.
01:52After returning to the US,
01:53he worked in broker-dealer firms in New York and Washington
01:56before starting Hindenburg Research.
01:58A 2021 article in the Financial Times said,
02:01his team at Hindenburg comprised just five full-time employees
02:05and a handful of contractors.
02:06Small is the new big.
02:08The article said Anderson had put his career on the line
02:11by doing critical research that has the power of influencing markets.
02:14Anderson, according to the American press,
02:16has a gift for a type of stock trading called short-selling.
02:20This has allowed Hindenburg to get very famous and very successful.
02:25How do they do it?
02:26Short-sellers bet against stocks or other assets.
02:29Some short-sellers simply bet on the fall in a company's stock price.
02:33But the ones who are known in the market as activist short-sellers
02:36release research about irregularities in a given company.
02:39These reports about alleged wrongdoing trigger a selling spree,
02:43allowing firms like Hindenburg to deploy their short-selling chops.
02:47So does that make them a force of good or corporate predators
02:50who not only hurt the companies they target,
02:53but also the small-time investor like you and me in the process?
02:56Well, according to the Washington Post,
02:58corporate executives see activist short-sellers as unsavory actors
03:02trying to profit by destroying companies.
03:04But then there are those who believe these guys
03:07are beneficial for the system overall
03:09because they expose alleged corporate irregularities.
03:12And that's that.
03:13Hindenburg first released a report against the Adani Group in January 2023,
03:17alleging that the group made improper use of tax havens and manipulated stocks.
03:22This report had caused India's market regulators,
03:24Securities and Exchange Board of India to open an investigation,
03:28which was still going on.
03:29A fresh Hindenburg report on 10th August 2024
03:32alleged that SEBI chairperson Madhumi Puri Butch and her husband
03:36previously had investments in offshore funds also used by the Adani Group.
03:41This is an explosive allegation
03:44because it alleges that the umpire herself is compromised.
03:48The couple denied the allegations accusing Hindenburg of character assassination.
03:53The Adani Group also denied the allegations saying
03:56Hindenburg selectively picked out publicly available information
04:00to come to predetermined conclusions.