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Activist short seller Nathan Anderson, famous for his campaigns against Adani Group, Super Micro and Nikola, is shutting down his firm Hindenburg Research seven years after he founded it.
“The plan has been to wind up after we finished the pipeline of ideas we were working on,” Anderson wrote in a statement. He described the job as “rather intense, and at times, all-encompassing”.
Anderson had become one of the most prominent activist short sellers on Wall Street, known for meticulously detailed reports and relentless pursuit of companies he alleged were committing fraud.
His rise came at a time when many peers were losing steam, handicapped by a decade-long bull market and the growth of passive investment funds that made it difficult to go against the grain.
Renowned short seller Jim Chanos told investors he was closing his short focused funds in November 2023 after more than three decades in the industry while Bill Ackman, famous for a costly campaign against Herbalife, swore off the practice entirely.
Activist short selling is a notoriously difficult business that is typically shunned by big Wall Street institutions. Smaller players tend to use balance sheet arrangements with partner hedge funds and get a cut of the fees but are the face of the public campaigns.
Hindenburg worked with a small New York-based firm called Kingdon Capital on a number of its trades.
The practice can also be legally fraught. Last year, US regulators charged Andrew Left, a short seller who founded Citron Research, with fraud for alleged market manipulation. He has pleaded not guilty, and the trial is set for September.
Despite all of the challenges, supporters see short sellers as necessary to balance out market euphoria.
Hindenburg was prolific, often targeting several large companies at once, a level of intensity that appears to have become too much for Anderson. “It has come at the cost of missing a lot of the rest of the world and the people I care about,” he wrote in a letter published on Wednesday. “It wasn’t always obvious to me, but I now view all of this as a love story.”
Hindenburg’s last published report came at the start of the year and focused on online car retailer Carvana.
Anderson shot to fame with a report against electric truck company Nikola, at the time a darling of the boom in businesses going public through shell companies known as special purpose acquisition companies.
The report included the now infamous video of a truck rolling downhill and led to founder Trevor Milton’s fraud conviction as well as a $125mn fine paid by the company.
The case drew huge media attention and brought Anderson a large following who eagerly anticipated Hindenburg reports and speculated about its next potential targets.
Hindenburg’s research has led to fraud charges and indictments against dozens of individuals, according to its website, but has also resulted in expensive legal battles. The firm had just 11 employees.
Hindenburg also leaned on unconventional research methods.
When it dug into a suspected Ponzi scheme in 2022, it outfitted a private jet with equipment to secretly record a company representative making a pitch to a Hindenburg employee.
Anderson got his start in investigating corporate misbehaviour by targeting hedge funds. In 2014, he filed his first whistleblower report to the US Securities and Exchange Commission, according to Hindenburg’s website.
Anderson took on some of Wall Street’s most famed investors, including another activist Carl Icahn. A report published by Hindenburg in 2023 on Icahn Enterprises sent shares in the company down 20 per cent and forced the billionaire to restructure his personal loans.
“We have all worked extremely hard, with a focus on precision and letting the evidence dictate our words,” Anderson wrote in the Wednesday announcement. “Sometimes this meant taking big swings and taking on fights that are much bigger than any of us as individuals.”
Anderson’s parting gift for his followers was a YouTube link to a DJ set played in Bali. “It had a big impact on me at a pivotal time,” he wrote.
