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> Initial Disclosure: After extensive research, we have taken a short position in Adani Group Companies

toomuchtodo 4y ago
That is pretty much what Hindenburg does; they find frauds and short them. Peruse their site. I mean, it’s in the name, you know, like the dirigible. https://hindenburgresearch.com/ https://hindenburgresearch.com/ https://en.wikipedia.org/wiki/Hindenburg_disaster https://en.wikipedia.org/wiki/Hindenburg_disaster
- philwelch 4y ago
  I thought it was named after the former German field marshal and president.
  - layer8 4y ago
    Transitively, in any case.
  - sofixa 4y ago
    Funnily thanks to the Hindenburg disaster the airship is much more popular worldwide (outside of Germany and maybe the immediate vicinity) than the person it was named after. Which is kind of unfortunate because Paul von Hindenburg is a fascinating figure with an enormous impact on world history. Not only was he a highly successful field marshal on the Eastern Front in WWI (after being brought out of retirement to replace the panicking previous commander there), he later became de facto dictator of Germany for the remainder of the war (until it was time to surrender, then he threw the dumpster fire over the wall to the civilian politicians). (Of course as his second, Ludendorff, wouldn't miss to tell anyone after the war, Hindenburg's role was more one of moral authority, calming presence and coordination, the actual war plans being made by the people under him, most notably Ludendorff who was really pissed after the war Hindenburg took all the credit). However he's even more interesting after WW1, when his popularity brings him to being elected as President, being in de facto control of Germany again thanks to a constitutional workaround, and then working to stop Hitler from getting to power before finally being convinced to give him the chancellorship. After his death, Hitler also took over the presidentship, and that was that. So Hindenburg was the only man who could stop/delay Hitler from taking power, and he failed.
- fastball 4y ago
  Peruse* But yes, that is exactly what Hindenburg does – not sure if GC thinks shorting companies you think are frauds is a bad thing or what – as far as I'm concerned it is the best reason for shorts to exist! I'd have more questions if Hindenburg wasn't shorting Adani Group after this report.
  - toomuchtodo 4y ago
    Thank you for correcting my typo!
- SOLAR_FIELDS 4y ago
  Pretty cool and makes the name make a lot more sense too.
- laverya 4y ago
  Honestly, it's a great thing that our financial system enables and rewards investigations like this. (It's a less great thing that fraud of this sort is possible, and that falsely accusing others of fraud can happen too)
  - taude 4y ago
    Unless you're wallstreet trying to punish some poorly run companies and leadership by shorting them, and then having a reddit lynch mob coming after you.
    - vintermann 4y ago
      Hindenburg don't seem to waste much time on merely "poorly run". They seem to go for frauds: stuff that whether you think it will go down right now or not, you can't deny that it should.
- mrandish 4y ago
  > That is pretty much what Hindenburg does; they find frauds and short them. While such firms certainly have an incentive to make the company they've shorted look bad, it turns out that it works best (and is easier) when the company they short actually is bad. Thus, they've found a way to make a business out of identifying frothy financial bubbles built on shaky-to-fraudulent fundamentals and popping them. It's kind of a public service in the sense that it corrects the market when it goes awry and ultimately they are betting their own money that their investigation is correct.
  - spelunker 4y ago
    People often don't like them but they have a function in the market for sure!
frozenport 4y ago
idk, should I also take one?
- eloff 4y ago
  Where do these trade?
  - owlninja 4y ago
    Looks like NSE - National Stock Exchange of India
- lmm 4y ago
  Given that we're reading this, it's probably priced in by now. But in principle the answer would be yes, but only with money you can afford to lose; any investment on a single-name stock is risky, and shorting is even more so.
  - barbazoo 4y ago
    And it's shorting, so no cap on losses, right?
    - lmm 4y ago
      Right, that's part of why it's so risky.
    - koolba 4y ago
      Naked short sure, but you could buy some out of the money calls to cap your max loss. It’d just eat into the profit margin of your total bet. If you’re going to keep shorting more on the way down it gets more complicated.
    - deleted 4y ago
      [deleted]
    - spelunker 4y ago
      sell short and set a limit buy order where your appetite for risk ends. But theoretically yea.
adam_arthur 4y ago
There are a few of these outlets that do research into companies with questionable accounting/fundamentals and then monetize the research via shorting+publicizing. Haven't seen many "manufactured fraud" allegations. In my experience the research is often quite in-depth and they tend to be proven correct in the end.
deleted 4y ago
[deleted]

That is pretty much what Hindenburg does; they find frauds and short them. Peruse their site. I mean, it’s in the name, you know, like the dirigible. https://hindenburgresearch.com/ https://hindenburgresearch.com/ https://en.wikipedia.org/wiki/Hindenburg_disaster https://en.wikipedia.org/wiki/Hindenburg_disaster

philwelch 4y ago
I thought it was named after the former German field marshal and president.
- layer8 4y ago
  Transitively, in any case.
- sofixa 4y ago
  Funnily thanks to the Hindenburg disaster the airship is much more popular worldwide (outside of Germany and maybe the immediate vicinity) than the person it was named after. Which is kind of unfortunate because Paul von Hindenburg is a fascinating figure with an enormous impact on world history. Not only was he a highly successful field marshal on the Eastern Front in WWI (after being brought out of retirement to replace the panicking previous commander there), he later became de facto dictator of Germany for the remainder of the war (until it was time to surrender, then he threw the dumpster fire over the wall to the civilian politicians). (Of course as his second, Ludendorff, wouldn't miss to tell anyone after the war, Hindenburg's role was more one of moral authority, calming presence and coordination, the actual war plans being made by the people under him, most notably Ludendorff who was really pissed after the war Hindenburg took all the credit). However he's even more interesting after WW1, when his popularity brings him to being elected as President, being in de facto control of Germany again thanks to a constitutional workaround, and then working to stop Hitler from getting to power before finally being convinced to give him the chancellorship. After his death, Hitler also took over the presidentship, and that was that. So Hindenburg was the only man who could stop/delay Hitler from taking power, and he failed.
fastball 4y ago
Peruse* But yes, that is exactly what Hindenburg does – not sure if GC thinks shorting companies you think are frauds is a bad thing or what – as far as I'm concerned it is the best reason for shorts to exist! I'd have more questions if Hindenburg wasn't shorting Adani Group after this report.
- toomuchtodo 4y ago
  Thank you for correcting my typo!
SOLAR_FIELDS 4y ago
Pretty cool and makes the name make a lot more sense too.
laverya 4y ago
Honestly, it's a great thing that our financial system enables and rewards investigations like this. (It's a less great thing that fraud of this sort is possible, and that falsely accusing others of fraud can happen too)
- taude 4y ago
  Unless you're wallstreet trying to punish some poorly run companies and leadership by shorting them, and then having a reddit lynch mob coming after you.
  - vintermann 4y ago
    Hindenburg don't seem to waste much time on merely "poorly run". They seem to go for frauds: stuff that whether you think it will go down right now or not, you can't deny that it should.
mrandish 4y ago
> That is pretty much what Hindenburg does; they find frauds and short them. While such firms certainly have an incentive to make the company they've shorted look bad, it turns out that it works best (and is easier) when the company they short actually is bad. Thus, they've found a way to make a business out of identifying frothy financial bubbles built on shaky-to-fraudulent fundamentals and popping them. It's kind of a public service in the sense that it corrects the market when it goes awry and ultimately they are betting their own money that their investigation is correct.
- spelunker 4y ago
  People often don't like them but they have a function in the market for sure!

frozenport 4y ago

idk, should I also take one?

eloff 4y ago
Where do these trade?
- owlninja 4y ago
  Looks like NSE - National Stock Exchange of India
lmm 4y ago
Given that we're reading this, it's probably priced in by now. But in principle the answer would be yes, but only with money you can afford to lose; any investment on a single-name stock is risky, and shorting is even more so.
- barbazoo 4y ago
  And it's shorting, so no cap on losses, right?
  - lmm 4y ago
    Right, that's part of why it's so risky.
  - koolba 4y ago
    Naked short sure, but you could buy some out of the money calls to cap your max loss. It’d just eat into the profit margin of your total bet. If you’re going to keep shorting more on the way down it gets more complicated.
  - deleted 4y ago
    [deleted]
  - spelunker 4y ago
    sell short and set a limit buy order where your appetite for risk ends. But theoretically yea.

adam_arthur 4y ago

There are a few of these outlets that do research into companies with questionable accounting/fundamentals and then monetize the research via shorting+publicizing. Haven't seen many "manufactured fraud" allegations. In my experience the research is often quite in-depth and they tend to be proven correct in the end.

deleted 4y ago

[deleted]