Nathan Anderson has been known to dig into the frauds of companies he knows may not be involved in New York parties.
“I’m not leading by, ‘hello, my name is Nate and I’m a short seller’,” founder Hindenburg Research says. “This is the best way to get rid of any party or group.”
Anderson made a name for himself by taking some of the best-known businesses to the forefront in the company’s recent empty bonanza, including electric car founders Nikola and Lordstown Motors.
This week it has dropped a bomb on the already struggling market for profit-making companies Writers of Kings, business betting business that seems to be the catalyst for growth. Shares initially fell by more than 11% but have since recessed.
Spacs are still the year to spend more than $ 100bn that has been raised so far, according to Refinitiv, but for Anderson the recurrence of the episode was no accident. “We don’t just say, ‘Hey, we’ll see the Spacs today’,” he says, adding that his team “just follows” the deception.
The 37-year-old, who has built a small group in Hindenburg with five full-time employees and a few contractors, has saved himself from a difficult research that he says is an important part of modern markets.
“Not all goods have to go to the moon,” he said.
Reliable and sometimes proud, Anderson grew up in a small town in Connecticut and continued his business studies at the University of Connecticut. In search of “different experiences in their lives”, he decided to take a short course to study abroad in Jerusalem where he also volunteered for a nearby ambulance – which still informs him of his temporary marketing strategy.
“Like ambulance medicine, you are trying to heal what is broken,” he said. In Hindenburg, “we come and try to shed light on some of the problems that may be hiding in these other companies, in other factories, and see if we can fix things.”
Back in the US, Anderson took on the task of liaising with financial firm FactSet to manage the clients of financial managers where he realized that “the ways in which these companies were similar were not really necessary”.
Positions in the retail companies in Washington and New York followed, including efforts on hedge funds and sales opportunities. He began to understand the ways in which the pyramid could be formed and, “fascinated by the combination and curiosity”, began to explore them in due course.
His first break came when he wanted to hone his research skills. Anderson contacted Harry Markopolos, a researcher known for promoting the Ponzi scheme of Bernard Madoff, and agreed on a case against the Platinum Partners, a hedge fund that eventually paid $ 1bn fraud.
Anderson and Markopolos have not been recognized in the past as warnings in the case, with seven high-ranking officials being prosecuted and several acquitted.
“You are the greatest researcher in the world,” says Markopolos, whom Anderson sees as his mentor. “If they can find the truth, they find it and often realize that there are bones in the room.”
Sometimes he has to “turn on the lights”, Anderson encouraged his spending money by selling his handfuls to members of a small group of like-minded researchers to get every paid share. At first he followed small companies but has already started doing this.
“Nikola was then the first to grow and famous,” says Markopolos. “He’s writing and companies are afraid of him.”
Anderson’s exit comes at a critical time for short sellers, who have been victimized by the longest-running market in history. Even heavyweights like Jim Chanos and David Einhorn wrestled in a market that is constantly going to the top; others, including Bill Ackman, have stopped betting with companies altogether.
This year has been a busy one, with the Reddit military team joining forces to promote a few shares whose vendors are the first enemy in the group. Anderson has been a target of countless places in daytime forums but takes it all in stride. “The pre-investment money was fun”, he says.
His favorite is a video featuring Chamath Palihapitiya – a Spac sponsor who took over the Clover Health group – like King Kong and Hindenburg, who published the company’s research research, such as Godzilla. In the caption, “King Kong strongly hits the living wax from Godzilla, and we were, of course, very successful.”
Some economists, even after purchasing, claim to have received his research. Tony Kypreos, founder of a financial advice firm who first met Anderson eight years ago, says that there are few people who do the same work.
“Anderson is doing a very good job, because if you show that state-owned companies or private investors are spreading what is not right, that’s a big deal,” Kypreos said.
Companies threatened by Hindenburg do not feel the same way, and have criticized or ridiculed his claims, while others say his reports are advertisers.
Anderson insists that he not be too picky about the car.
“I still keep in my mind that there could be a good Spac out there,” he says. “I haven’t seen it yet.”
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