The Little Shop That Shook India

Nate Anderson’s Hindenburg Research makes money by making companies miserable

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To the companies he attacks, what Nathan Anderson does for a living is unethical, even immoral. But to most Wall Street professionals, he provides a necessary service by highlighting potentially overhyped companies and ensuring that markets do their job. Whether they consider him a vulture or a savior, they all agree that Anderson and his firm, Hindenburg Research, are good at what they do: taking companies down and making money from it.

Anderson is what’s known as an activist short seller. He exposes accounting discrepancies and alleged wrongdoing in scathing reports that journalists quote liberally in articles that often spur government investigations, all with the goal of nudging investors to sell. He typically works closely with deep-pocketed investors who place short bets— borrowing shares and selling them back at a profit when the price declines—alongside his.

Since he incorporated Hindenburg in 2018 from an apartment in New York, Anderson has targeted dozens of companies, but most have been small and had US-only footprints. Named for the ill-fated zeppelin, Hindenburg says its mission is to point out “man-made disasters” that are bound to blow up. Then it speeds the process along. On average, targeted company stocks fell about 15% the day after Hindenburg’s negative report appeared and were down 26% six months later, according to calculations by Bloomberg News. Now Anderson is gunning for one of India’s biggest conglomerates, a group of companies controlled by Gautam Adani, until recently Asia’s richest man, who’s perceived to have close ties to Indian Prime Minister Narendra Modi. It’s a huge gamble—and it appears to have paid off.