2023: Hindenburg's Year

2023: Hindenburg's Year

We want to highlight Hindenburg Research’s activity this year outside our usual annual activist short-selling review. This is due to the prominence of the activist well outside the usual borders of the short-selling world. While many seasoned short-sellers continued to publish new campaigns, we believe Hindenburg did take a special spot this year.

The reasons are quite simple and point to the stellar track record Hindenburg is building. Stocks that Hindenburg Research focused on in 2023 are, on average, down 31.5%. This is despite S&P 500 being up almost 25% in 2023. 

Above-mentioned 31.5% decline, does not even include their recent successful brief flag on Maison Solutions (MSS):

Not only did Hindenburg notch one of just three zeroes this year and amassed other wins, but the research had a profound impact on the markets. We would be repeating ourselves if we were to describe the Adani saga all over again, but we want to highlight that the findings continue to put pressure on the group. 

The stocks might have rebounded, but Hindenburg managed to uncover what seems like a large mystery in the fifth largest economy in the world connected all the way to the ruling elites. 

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Hindenburg also did not hesitate to shake up the US financial community when they launched a campaign against Icahn Enterprises, alleging Carl Icahn is using it to prop up its investments and lure people in for an unsustainable dividend. The stock is now down about 66% since that call which prompted interested parties to comment. 

In 2023, Hindenburg also saw plenty of regulatory action connected to Hindenburg’s previous picks. Towards the end of December alone, the activist saw three major developments confirming their research and unravelling the stocks in question. 

Most notably, EBIX recently entered Chapter 11. The activist wrote about the stock in 2022, alleging that the IPO of a subsidiary is not going through. 

EBIX was also a target of several other activists before Hindenburg. Another big news on the regulatory front came from Nikola. Yes, the founder of that 'rolling down the hill' EV has been sentenced to four years in prison for fraud. 

Hindenburg worked with whistleblowers to uncover Nikola and their dubious business in 2020. One recent campaign also got significant confirmation from the regulatory bodies. Tingo (TIO), African agri-fintech businesses, is now in the crosshairs of the SEC as the founder and three affiliated US entities were charged with ‘massive fraud’. 

Given the high activity of Hindenburg, they released seven campaigns this year, some of the stocks are not moving yet. It will be interesting to track stories such as Freedom Holding (FRHC), which is up over 8% so far. The stock is holding despite Hindenburg's allegations and pressure. 

Hindenburg followed other activists and dug into alleged FRHC’s dubious corporate governance. Despite the findings, the market does not seem to care, at least for now. However, Hindenburg is patiently asking questions.

Another stock that refused to go down is Block (SQ). There, Hindenburg came out with allegations of regulatory risk due to CashApp. The research was followed up with a peculiar video material.

So there you go, Hindenburg is able to bust a national conglomerate in India and at the same time research potential money laundering in the US. The scale of their activity is certainly making Hindenburg one of top short-sellers right now in the eyes of the public. We can’t wait to track their activity in the upcoming year. Unfortunately, the golden age of fraud seemingly continues unabated. 

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* Note: Presented data and analytics is as of available on 2023-12-29, UTC 12:00.

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