New Delhi:
American short-selling firm Hindenburg Research, which had made several baseless and false allegations against India’s Adani Group and other big companies by targeting them, is now going to be shut down. Hindenburg’s founder Nathan Anderson announced the closure of this company. Through its reports, this company had targeted not only Adani Group of India but also many big companies of America.

This company was established in 2017 and its main work was to detect stock market irregularities, account mismanagement and manipulation. Now, with the closure of Hindenburg Research, an era is coming to an end that has long been part of the game of short-selling and disclosures.

Why is Hindenburg Research closing?

Nathan Anderson described the decision to close the Hindenburg as a ‘personal’ decision. Although he did not give any specific reason for this, but he made it clear that the company decided to end it after reaching its destination. He told in his post that this decision was taken after many conversations and discussions.

Trump’s decision to close Hindenburg before his inauguration surprised

The reasons given by founder Nathan Anderson for the decision to close the company are somewhat vague. The special thing is that this step was taken just before Donald Trump took oath as President, which is somewhat surprising. Many people are considering it as a politically conscious step.

Company came into controversy by making false allegations against Adani Group

The firm came into controversy, especially in 2023 when it published a report against the Adani Group, in which several serious allegations were made against the Adani Group, which were later found to be baseless in the SEBI investigation. Adani Group had also completely denied this report. After this, Hindenburg also issued reports on many other companies, such as Dorsey’s Block Inc. and Icahn Enterprises, due to which these companies suffered huge losses.

The report released by Hindenburg Research in 2023 targeting Adani Group was described by Adani Group as a “lie” and the report as an attack on India. This report had made serious allegations against major Indian companies, which the group completely denied.

Hindenburg and the game of short-selling

As soon as the name of Hindenburg comes to mind, another word comes to mind, and that is ‘short selling’. This is the strategy under which companies like Hindenburg used to earn billions of rupees. Short selling is a trading practice in which the short seller sells borrowed shares and then makes a profit by buying the same shares at a lower price. Companies like Hindenburg were a part of this game and profited from short-selling when the company’s stock prices fell due to its reports.

How does short-selling work?

Let us explain it to you in simple language… Short-selling means selling a stock without keeping it with you. The objective of short-selling companies is to make the share price of that company fall, so that they can take profit by buying the borrowed shares at a lower price.

For example, if a company’s stock is priced at Rs 400, the short-seller borrows it and sells it for Rs 400. Later, when the stock of that company falls to Rs 200, he buys back the borrowed shares and returns it. Thus he makes a profit of Rs 200 per share. Hindenburg had played this game of short-selling with many companies.

What is the risk in short-selling?

However, you also need to know that short-selling can be profitable, but it also involves huge risks. If the price of shares does not fall, but instead increases, the short-seller may suffer huge losses. This is why short-selling is considered dangerous and harmful to the market, as it can cause losses to investors and shake the stability of the market.

Hindenburg Research had made many big revelations through its reports not only against Indian companies but also against international companies. However, now Anderson has decided to close Hindenburg Research, telling about his experience, struggles and achievements. He says his work is done, and now it’s time to call it quits.

However, the closure of the Hindenburg leaves many questions, but it also shows that the game of short-selling may now be over.

(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)