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The Ambanis are actually not very different from the Adanis, just better at hiding. Hindenburg might have take a short position based on numbers but its likely

The Ambanis are actually not very different from the Adanis, just better at hiding. Hindenburg might have take a short position based on numbers but its likely that as long as the current government stays in power its unlikely these two giants (whether they are really giants or no) will change as governments play a big role in such things. Like someone pointed out, it's more likely that their cons will outlast Hindenburgs short positions. Also we dont know the size of Hindenburgs short. For all we care they have shorted 10$ for this article. I am not defending Adani but I did make money on Adani Wilmar simply because compared to other FMCG stocks it was actually undervalued. If you look at some of the other fmcgs they are significantly more overvalued than Adani Wilmar was when it entered IPO. I gained almost 3x in a short while after which it hit the overvaluation equal to other FMCGs and I exited obviously because from a value stand point it made no sense even at IPO. So when Hindenburg says this will all crash, they are assuming everyone goes by the books in this world.

Sai_ 4y ago
From the article, Hindenburg’s short positions are outside India’s capital markets which (presumably) have better oversight/more skittish/sophisticated investors who would prefer not to do business with a sham company.
- trustingtrust 4y ago
  Betting against it is doing business with the company. Whether directly in the Indian market or in a market outside India. If I bet against a race happening in some other part of the world, I am in some capacity (indirectly) involved in the race. All they are doing is using analysis to predict a crash and betting against it. I dont like the idea of 'This seems fishy so let's bet against it'. If something feels fishy stay away from it as much as possible. Michael Burry doesn't happen every day.
  - arcticfox 4y ago
    > Betting against it is doing business with the company. What do you mean? I struggle to understand how betting against a company is "doing business" with them, it seems even less like "doing business" than having no relationship at all. You are actively signaling you expect them to fail.
    - trustingtrust 4y ago
      I think 'with' was the wrong word here. Betting against a company is being in business around the company. Meaning you still trust the business, just trust it enough to fail. You can't not trust something and at the same time bet against it. You must trust one of the two if you want to be involved with the company.
      - Thorrez 4y ago
        I don't think you're trusting the company when you bet against it. You're trusting the stock market and brokerage you're using to do the short. If the company completely disappears tomorrow, your short will be profitable.
        smabie 4y ago
        Well, then you couldn't cover your short position.
        Thorrez 4y ago
        Why would you need to? Who wants it back?
        jimmydorry 4y ago
        Nobody, but you would continue paying fees on your short position and there would be no liquidity to close it out.
        4y ago
fakedang 4y ago
Mukesh Ambani changed the face of Indian telecom with Jio and its novel pricing model. Not to mention, Reliance has tons of businesses with actual real value, real history and real employees. Mukesh Ambani plays along with both the parties. Gautam Adani is a Gujarati impex trader who won the lottery when his pony won the parliamentary race. I would argue both families are extremely different, even if they seem culturally similar on the outside. That being said, I would say there are parallels to Gautam Adani and Dhirubhai Ambani (Mukesh's father, for those ootl).
- deleted 4y ago
  [deleted]
rhaway84773 4y ago
The Ambanis are very different than the Adanis. 1) The Ambanis didn’t exist when the Ambanis were rising. This is similar to how everyone wants to be the next Amazon, ignoring the little fact that unlike when Amazon was growing, there already is an Amazon now. 2) The Ambanis were able to ride a wave of massive growth post liberalization to cover up their illegal dealings and essentially become legitimate. It’s not clear that there is any such wave of massive growth available to the Adanis to cover up their illegal dealings. 3) The Ambanis raised money illegally almost entirely locally, which meant they avoided international scrutiny, and they did so at a time when the Indian financial agencies were simply not mature enough. The Adanis will be raising foreign funds which increases scrutiny, but also Indian regulatory agencies are far more mature at this point. 4) The Ambanis valuation did collapse dramatically for a significant period of time. The difference is that the business has been split between the 2 brothers and one went to almost 0, while the other grew slightly. Their combined wealth, simulating the market cap of the company, has declined drastically from its peak level.

Sai_ 4y ago

From the article, Hindenburg’s short positions are outside India’s capital markets which (presumably) have better oversight/more skittish/sophisticated investors who would prefer not to do business with a sham company.

trustingtrust 4y ago
Betting against it is doing business with the company. Whether directly in the Indian market or in a market outside India. If I bet against a race happening in some other part of the world, I am in some capacity (indirectly) involved in the race. All they are doing is using analysis to predict a crash and betting against it. I dont like the idea of 'This seems fishy so let's bet against it'. If something feels fishy stay away from it as much as possible. Michael Burry doesn't happen every day.
- arcticfox 4y ago
  > Betting against it is doing business with the company. What do you mean? I struggle to understand how betting against a company is "doing business" with them, it seems even less like "doing business" than having no relationship at all. You are actively signaling you expect them to fail.
  - trustingtrust 4y ago
    I think 'with' was the wrong word here. Betting against a company is being in business around the company. Meaning you still trust the business, just trust it enough to fail. You can't not trust something and at the same time bet against it. You must trust one of the two if you want to be involved with the company.
    - Thorrez 4y ago
      I don't think you're trusting the company when you bet against it. You're trusting the stock market and brokerage you're using to do the short. If the company completely disappears tomorrow, your short will be profitable.
      - smabie 4y ago
        Well, then you couldn't cover your short position.
        Thorrez 4y ago
        Why would you need to? Who wants it back?
        jimmydorry 4y ago
        Nobody, but you would continue paying fees on your short position and there would be no liquidity to close it out.
        4y ago

fakedang 4y ago

Mukesh Ambani changed the face of Indian telecom with Jio and its novel pricing model. Not to mention, Reliance has tons of businesses with actual real value, real history and real employees. Mukesh Ambani plays along with both the parties. Gautam Adani is a Gujarati impex trader who won the lottery when his pony won the parliamentary race. I would argue both families are extremely different, even if they seem culturally similar on the outside. That being said, I would say there are parallels to Gautam Adani and Dhirubhai Ambani (Mukesh's father, for those ootl).

deleted 4y ago
[deleted]

rhaway84773 4y ago

The Ambanis are very different than the Adanis. 1) The Ambanis didn’t exist when the Ambanis were rising. This is similar to how everyone wants to be the next Amazon, ignoring the little fact that unlike when Amazon was growing, there already is an Amazon now. 2) The Ambanis were able to ride a wave of massive growth post liberalization to cover up their illegal dealings and essentially become legitimate. It’s not clear that there is any such wave of massive growth available to the Adanis to cover up their illegal dealings. 3) The Ambanis raised money illegally almost entirely locally, which meant they avoided international scrutiny, and they did so at a time when the Indian financial agencies were simply not mature enough. The Adanis will be raising foreign funds which increases scrutiny, but also Indian regulatory agencies are far more mature at this point. 4) The Ambanis valuation did collapse dramatically for a significant period of time. The difference is that the business has been split between the 2 brothers and one went to almost 0, while the other grew slightly. Their combined wealth, simulating the market cap of the company, has declined drastically from its peak level.