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For those of you not familiar, Hindenburg Research has done a riveting, blistering critique and 'takedown' of the sham company "Nikola." Highly recommend the r

For those of you not familiar, Hindenburg Research has done a riveting, blistering critique and 'takedown' of the sham company "Nikola." Highly recommend the read: https://hindenburgresearch.com/nikola/ https://hindenburgresearch.com/nikola/

erhk 5y ago
They also profit immensely off of these "takedown" articles.
- umanwizard 5y ago
  Of course. Why else would they publish them?
  - deleted 5y ago
    [deleted]
- bob33212 5y ago
  It would be a pretty stupid business plan to do a ton of fake research about a company just to make a quick buck off the initial drop in the stock. If NKLA turned out to be a great company that was on their way to huge success the researchers would look incompetent, regardless of if they made any money off of shorts.
- mgh2 5y ago
  Of course, should they not get compensated for calling out fraud and protecting investors? “Infamous” short sellers play a big part in public market ethics after all - contrary to current Reddit sentiment. The real villains hide behind anonymous forums like WSB, using social media media to pump and dump stocks and change the public narrative. Hindenburg also published this piece to emphasize the importance and dispel the negativity of short sellers https://hindenburgresearch.com/clover/ https://hindenburgresearch.com/clover/
  - weasel_words 5y ago
    ETHICAL short sellers. Reddit is after naked short sellers. Big difference.
    - mgh2 5y ago
      This needs more investigation, will find out soon - biased though (author selling book): https://news.ycombinator.com/item?id=26271960 https://news.ycombinator.com/item?id=26271960
- vmception 5y ago
  A catalyst towards proper price discovery and liquidity. These are correctly aligned incentives. If the entire market doesn't care, as it shouldn't, then its merely informative and helps more investors be aware of the great revenue printer. If the market freaks out because they think others will freak out, those traders are the stupid ones and Hindenburg played the gullible people. From what I read, the money losing company will likely have some brand conscious companies disassociate, while the money winning company will continue printing revenue.
- intro-b 5y ago
  welcome to the world of activist investing
- sQL_inject 5y ago
  I don't see this as a conflict of interest or foul play if their assertions are correct and truthful, although I get a sense of your potential hesitation with the practice. To abstract it a bit for the sake of argument: the police profit from policing, and can continue to do so as long as it remains a societal net good -- if it tips into nepotism then of course it should be corrected. I view these sorts of firms as a mechanism of reversion to the mean.
- AtlasBarfed 5y ago
  IMO These shorters are doing an enormous service to the economy exposing corruption and malfeasance in (relatively) early stages. If they profit from it, good for them. Contrast this shorting behavior with massive scale market manipulation done by some multinational powerhouses with strong political connections. In the absence of any meaningful regulation/enforcement by the FTC/DOJ/SEC/etc, these mechanisms are what the world is left with. Kind of like class action lawsuits, I would prefer a better mechanism, but at least it provides some mechanism to combat these things.

erhk 5y ago

They also profit immensely off of these "takedown" articles.

umanwizard 5y ago
Of course. Why else would they publish them?
- deleted 5y ago
  [deleted]
bob33212 5y ago
It would be a pretty stupid business plan to do a ton of fake research about a company just to make a quick buck off the initial drop in the stock. If NKLA turned out to be a great company that was on their way to huge success the researchers would look incompetent, regardless of if they made any money off of shorts.
mgh2 5y ago
Of course, should they not get compensated for calling out fraud and protecting investors? “Infamous” short sellers play a big part in public market ethics after all - contrary to current Reddit sentiment. The real villains hide behind anonymous forums like WSB, using social media media to pump and dump stocks and change the public narrative. Hindenburg also published this piece to emphasize the importance and dispel the negativity of short sellers https://hindenburgresearch.com/clover/ https://hindenburgresearch.com/clover/
- weasel_words 5y ago
  ETHICAL short sellers. Reddit is after naked short sellers. Big difference.
  - mgh2 5y ago
    This needs more investigation, will find out soon - biased though (author selling book): https://news.ycombinator.com/item?id=26271960 https://news.ycombinator.com/item?id=26271960
vmception 5y ago
A catalyst towards proper price discovery and liquidity. These are correctly aligned incentives. If the entire market doesn't care, as it shouldn't, then its merely informative and helps more investors be aware of the great revenue printer. If the market freaks out because they think others will freak out, those traders are the stupid ones and Hindenburg played the gullible people. From what I read, the money losing company will likely have some brand conscious companies disassociate, while the money winning company will continue printing revenue.
intro-b 5y ago
welcome to the world of activist investing
sQL_inject 5y ago
I don't see this as a conflict of interest or foul play if their assertions are correct and truthful, although I get a sense of your potential hesitation with the practice. To abstract it a bit for the sake of argument: the police profit from policing, and can continue to do so as long as it remains a societal net good -- if it tips into nepotism then of course it should be corrected. I view these sorts of firms as a mechanism of reversion to the mean.
AtlasBarfed 5y ago
IMO These shorters are doing an enormous service to the economy exposing corruption and malfeasance in (relatively) early stages. If they profit from it, good for them. Contrast this shorting behavior with massive scale market manipulation done by some multinational powerhouses with strong political connections. In the absence of any meaningful regulation/enforcement by the FTC/DOJ/SEC/etc, these mechanisms are what the world is left with. Kind of like class action lawsuits, I would prefer a better mechanism, but at least it provides some mechanism to combat these things.