Hindenburg's Nate Anderson: Man who 'shook empires that needed shaking'

For Hindenburg Research, the exit was as abrupt as the entry.

 

The short-seller, founded in 2017, shot to fame with a series of reports whose targets included Gautam Adani, Jack Dorsey, Carl Icahn, and the chief of India’s market regulator, Madhabi Puri Buch. Its reports rattled investors, damaged reputations, and raised political storms. But on Thursday, its founder, Nate Anderson, announced that he is shutting the firm. 

In his parting shot, Anderson said he was naïve about the dangers he would face when he started Hindenburg but was drawn to the path he chose “magnetically”. 

Since Hindenburg Research’s establishment in 2017, Anderson has targeted dozens of companies through nearly 40 research reports and articles. Though Hindenburg Research made waves in India in 2023 with its report on the Adani group of companies, Anderson had his eyes on Indian corporations from the very start. The first two reports released in the first year of operation were “centred on then-US-listed Indian film company Eros International”, according to Hindenburg Research’s website. 

One of the most notable cases for Anderson and his firm was its 2020 report on Nikola Corporation, an electric vehicle company that promised to revolutionise the transportation industry. Hindenburg’s investigation accused Nikola of misleading investors by exaggerating its technological capabilities. The report sent Nikola’s stock plummeting and prompted investigations by regulators, while the company’s founder, Trevor Milton, faced legal consequences. 

Anderson hails from the state of Connecticut in the US. During his years at the University of Connecticut, he pursued international business studies. Before founding Hindenburg Research, Anderson worked in finance and data analysis. His first job was as a fact-checker for a financial data company. This job helped him develop a skill for finding mistakes and inconsistencies, which became important in his later work. 

Anderson’s decision to specialise in financial fraud investigations was inspired by Harry Markopolos, a financial fraud investigator who was instrumental in uncovering Bernie Madoff’s $64.8 billion investment scandal in the US in 2008. 

In the note released on Wednesday announcing the closing of Hindenburg Research, Anderson attributed his success also to whistle-blower lawyer Bryan Wood. 

“I would have failed right at the starting line had it not been for the support of world-class whistle-blower lawyer Bryan Wood, who took cases on despite my lack of financial resources. I had a newborn child and was facing eviction at the time. I was terrified but knew that if I stayed still, I would crumble. The only option I had was to keep moving forward,” he said. 

In his letter, Anderson went on to say he was not the typical elite school golf-playing, smooth-talking Wall Street insider. He spoke about the struggles he experienced when he started Hindenburg. But his letter left a lot unsaid. 

Since Hindenburg's reports began hitting the headlines, questions have been raised about its functioning and the alleged backing of billionaire George Soros. Hindenburg’s closure has left more room for speculation than revelation. The series of materials and videos Anderson has promised to release over the next six months, detailing how Hindenburg functions, will offer some clues. 

Anderson had first started a brokerage firm catering to hedge funds, focusing on offering due diligence services and fraud assessments. However, by 2017, the firm had amassed just $58,382 in net capital, prompting Anderson’s landlord to initiate eviction proceedings. These challenges led Anderson to forgo his brokerage licence and start Hindenburg. 

The firm’s name, referencing the infamous Hindenburg disaster, reflected Anderson’s philosophy of identifying companies poised for a major downfall, often due to unethical behaviour or inflated financials.