Once upon a time, the tragic crash of the Hindenburg airship in 1937 served as a wake-up call for Nathan Anderson. Inspired by this man-made disaster, Nathan, who had previously driven an ambulance in Jerusalem and earned a bachelor's degree from Connecticut, founded Hindenburg Research in 2017 with a mission to prevent future man-made disasters by exposing corrupt corporate practices. Driven by his passion for uncovering the truth, Nathan established Hindenburg Research as a platform for deep research and data analysis, determined to make a positive impact on the business world.
Before launching Hindenburg Research Firm, Nathan partnered with Harry Markopolos and together they exposed the world's biggest financial Ponzi scam, Bernie Madoff's fraud scheme. Hindenburg Research is a company that conducts in-depth investigations into publicly traded companies and identifies any unethical practices or overvaluation of stocks. Hindenburg conducts research for 2-3 years on a particular company and once they are ready, they share their findings with investors. These investors then invest in short selling, and Hindenburg releases the report publicly and challenges the corporate firm, causing the stock prices to drop drastically which results in huge profit making for the investors. Hindenburg earns a commission from the profit booked by their investors and this is how they make money.
Lets learn about this fancy stock market term "SHORT SELLING"
Short selling is a process where an investor sells a stock they do not own, hoping to buy it back at a lower price. For example, if an investor thinks the stock price of ABC Company will go down, they can borrow shares from another investor and sell them. If the stock price does indeed drop, the investor buys the shares back at a lower price and returns them to the original owner, pocketing the difference as profit.
The strange thing about Hindenburg Research is that there is no information available about where they are located in New York or who their team members are. Some reports suggest they operate in the dark web and have a team of 9 highly qualified research professionals. In the last 5 years, they have conducted 45 investigations, and in 75% of the cases, their research findings came true. In 29 cases, the stock prices fell by 50% after their reports were published.
Recently, Hindenburg conducted research on Adani Group, a multinational conglomerate in India. Before that, they investigated Nikola, an electric vehicle manufacturing company. Before the research was published, Nikola's market value was $35 billion, but after the report came out, it dropped to $1.3 million. Hindenburg claims that Adani stocks are overvalued and that the stock prices will drop by 80-85% after their report is published.
Over the last several months, Hindenburg, along with its associates and investors, have invested heavily in Adani stocks and steadily increased their holdings. But, on February 1st 2023, the international bank Credit Suisse and Citi Group deemed Adani Group bonds worthless, triggering a stock market crash in India. The stock market crash resulted in a loss of $65 billion for Adani Group and a loss of INR 4.2 lakh crore or $57 billion in market valuation for the Indian stock market.
In conclusion, the story of Hindenburg Research emphasizes the vital role of data-driven mindset and approach in today's modern world. In solving modern-day problems, a data-driven view approach is crucial and requires professionals with exposure and experience in data science and analysis. Data Analytics, Data Insights, Data Mining, and Data Storytelling should be an integral part of one's learning curve, and they should make the best use of the data available to them. The story of Hindenburg highlights the power of deep research, data analysis, and focused efforts in making informed decisions that can result in increased profits and improved performance. Data has become the new gold mine, with access to a data lake offering endless opportunities for businesses to make money. If you don't believe it, look at the Hindenburg Research case and make your own conclusion.