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Disclosure: Hindenburg Research does not hold positions, either long or short, in Tether, bitcoin or any cryptocurrency at the time of this press release.
by filvdg 5y ago
Disclosure: Hindenburg Research does not hold positions, either long or short, in Tether, bitcoin or any cryptocurrency at the time of this press release.
- perl4ever 5y agoDid they specify the time down to the nanosecond?
- tcgv 5y agoI wonder why this Reaserch firm is offering such a substantial bounty for information on Tether. What's in it for them? Where will this money come from? From their site they provide an answer (and even a "track record") [1]: > We look for (...) man-made disasters floating around in the market and aim to shed light on them before they lure in more unsuspecting victims. Hence it seems they're doing it for the bennefit of the public. So much for the expression "there's no such thing as a free lunch". [1] https://hindenburgresearch.com/about-us/ https://hindenburgresearch.com/about-us/
- skybrian 5y agoThere are firms that look for good opportunities to short stocks. Find some credible bad news, short the stock, then publicize the bad news. If the news is actually true, this might even be considered a public service (as well as obviously a way to make money). They probably wouldn’t do until they actually got a tip. Also, they might short crypto-related stocks if that’s easier.
- llimos 5y agoThis is how markets weed out the bad ones on their own, without relying on government.
- SantalBlush 5y agoNot really. Markets weed out unprofitable firms. Government doesn't really care about that. On the other side, government regulates firms that engage in some harmful (open to interpretation) practice, and markets don't care about that unless it makes them unprofitable.
- ygjb 5y agoI am curious about how that type of activity doesn't constitute insider trading? Presumably having "bad news" would constitute material nonpublic information?
- djbebs 5y agoBecause they are not insiders
- speedybird 5y agoIt might be insider trading in some countries, but it isn't in America. It's perfectly legal to trade on information you found out through your own research and didn't tell anybody about.
- snark42 5y agoThey do the equivalent of investigative journalism. Arguably everything they know is public, just no one has looked or put all the pieces together until they do a press release.
- qeternity 5y agoSimply trading on MNPI is not insider trading. You must have a fiduciary duty to protect said MNPI. If I do some analysis and reveal some MNPI for myself, it's perfectly legal to trade on that since I do not have a fiduciary duty to any publicly traded firms.
- deleted 5y ago[deleted]
- jfrunyon 5y agoBecause it's not nonpublic information. It's public information that no one else had put together the pieces on, yet. (Contrary to some of the other commenters, you don't have to be an insider yourself to run afoul of the law. If the information is not public and you got someone to leak it to you, for example. https://www.investor.gov/introduction-investing/investing-basics/glossary/insider-trading https://www.investor.gov/introduction-investing/investing-ba...)
- freeAgent 5y agoThey are fishing for edge. If they get information that they feel will be able to quickly move markets, they'll initiate a large position before dropping the release to the public. That's how they make money.
- b9a2cab5 5y agoPresumably they short the shit out of Tether and related stablecoins before they release the information they get. It's certainly for their own gain.
- toomuchtodo 5y agoAs qeternity pointed out in a comment [1], you want your trade to play out in a dollar denominated, clearinghouse backed financial product. You don't bet against the house in their casino (crypto exchanges), such as shorting tether. [1] https://news.ycombinator.com/item?id=28794377 https://news.ycombinator.com/item?id=28794377 (not investment advice, educational purposes only)
- WalterSear 5y agoI would hazard they are planning to target the BTC Futures ETF that opened this morning.
- maxbond 5y agoPresumably they would like to start a position by don't have sufficient information, and are attempting to buy that information. Hidenburg is a short seller who takes positions in their research. See for instance their short of Nikola. While I'm sure they enjoy being helpful and that there's a reason they choose to engage in a very difficult way to earn a living, when there are easier opportunities available, their motives are hardly a mystery. You can discount all their talk of helpfulness or assume they're just talking their book, and it doesn't really change anything.
- kfprt 5y agoPure speculation but I'd wager they have a position involving a 3rd party hedge fund etc with a sizable crypto position.
- paulpauper 5y agoso they can trade on it before announcing it and then with the profit pay for the bounty, assuming they pay up or assuming tether falls. Tether has survived thus far everything thrown at it. The market is evidently very confident about tether.
- nawgz 5y ago> The market is evidently very confident about tether. I don't see how that's a valid conclusion to draw. I would say in this case the "market" is completely codependent on Tether, and therefore are willing to overlook red flags until forced to via damage to pricing or legalities.
- qeternity 5y ago> The market is evidently very confident about tether. The market was very confident about Enron, WorldCom, Madoff, WireCard, Greensill, Theranos, WeWork, etc as well.
- jsemrau 5y agoIt's all good until it isn't. https://www.reuters.com/world/china/hong-kong-audit-watchdog-investigating-evergrandes-2020-accounts-2021-10-15/ https://www.reuters.com/world/china/hong-kong-audit-watchdog...
- hansjorg 5y agoThey usually disclose that they hold short positions at the same time as publishing their reports. If Tether unravels and brings down the whole cryptocurrency bubble, there are probably more indirect positions that are safer bets?
- epivosism 5y agoJust because someone has something to gain, doesn't mean that their actions are corrupt. “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages” -Adam Smith https://www.goodreads.com/quotes/68664-it-is-not-from-the-benevolence-of-the-butcher-the https://www.goodreads.com/quotes/68664-it-is-not-from-the-be...
- JumpCrisscross 5y agoIt's marketing. When Hindenburg publishes equity research, the disclosure is "you should assume that as of the publication date of any short-biased report or letter, Hindenburg Research...has a short position in all stocks (and/or options of the stock) covered herein, and therefore stands to realize significant gains in the event that the price of any stock covered herein declines." [1] https://hindenburgresearch.com/draftkings/ https://hindenburgresearch.com/draftkings/
- qeternity 5y agoPrecisely. It's too risky to actually short the crypto complex because if the Tether fraud is true, then they can pump it to $100k or $1m or whatever they want. But if they contribute to the unwind of a fraud of this scale, they will go down as heroes.
- hackingforfun 5y agoIf people aren't buying as much Bitcoin at $100k+ (I assume you are referring to Bitcoin), then what will cause it to go to $1m? I don't think they can have a guaranteed pump like you are saying.
- JumpCrisscross 5y agoIf a fraudulent Fed is fabricating Tethers, and some people are buying it, the price is a ruinous fiction to a short. For shorts, delusions matter in a way that they don’t for ride-it-out longs.
- dnautics 5y agoI wish they also published a list of things they were wrong about.
- elefanten 5y agoI agree, but "them and everyone else too..."
- sremani 5y agoYou can have positions in Microstrategy and Coinbase. If Tether tanks -- there are definitely decent proxies out there.
- PeterisP 5y agoThe expectation is that they will obtain large and valuable positions (either long or short) upon obtaining this information which is not (yet) known to the general public.
- ac29 5y agoIt notably doesnt say that their clients dont have any cryptocurrency positions. The $1M is coming from somewhere.
- freeAgent 5y agoThey'll certainly hold positions when they release any juicy findings they have.
- LittlePeter 5y ago$1 million is not that much, just for the sheer publicity Hindenburg gets. They're going to be quoted in WSJ, Economist, ... This brings new clients...
- Breza 5y agoThis is a good point. Dropping a million bucks on an ad campaign wouldn't get them this much publicity.
- IAmGraydon 5y agoPerhaps they’re holding long put contracts on the Bitcoin ETF that just started trading. Their disclosure would still be true as they own contracts, not shares. An interesting coincidence with the timing.