Hindenburg research's entire business revolves around producing "reports" about companies, claiming fraud and manipulation, and then short-selling on a large scale. They've done this in the past, and they've been sued.
In my wildly biased opinion, companies like Hindenburg are leeches that contribute nothing to the world.
While there may be some elements of truth behind their reports, I'd take it with a large helping of salt, given the main objective of this company.
They hunt for true fraud and they make their living off of being right often enough that their reports move the market.
If they weren't right often enough they would be ignored so they are incentivised to only publish when they think the odds are in their favor.
Ultimately they do good for the market, it sucks to be the people that invested before the reports land but chances are they protect more investors by outing fraud as soon as possible before it can get larger.
>If they weren't right often enough they would be ignored so they are incentivised to only publish when they think the odds are in their favor.
I disagree with this. This implies clear vision and we all know the very last thing a corporation will ever provide is clear vision. There is little difference a pump/dump and these people. Both are marketing ploys to allow them to make money.
>If a stock tanks because a report reveals the company was cooking the books, that's good for the market and the economy as a whole.
How about when a stock tanks because a report was wrong, or a report was specifically crafted to imply all kinds of things, just to tank the stock price.
Im sure that would be an honest mistake, that they just happen to make millions from. Whoopsie. smh.
I get the relationship between negative facts and a healthier stock market, but is anyone here naive enough to believe humans play things like massive mountains of money, honestly? rofl..
That corporate leadership are always paragons of transparency and announce all details accurately, so that business-as-usual markets can correctly price the stock?
Corporate press releases are explicitly crafted to benefit the stock price.
If the content of a negative third party report is accurate, then its intent doesn't matter.
If corporate leadership has a rebuttal, they're welcome to share!
If the content of a third party report is inaccurate, then the company is welcome to sue for libel, I assume?
That’s how they fund their research, otherwise this would be private and closely guarded information available only to people with deep pockets. There is quite enough of such establishments in the market on the long side.
This is the same logic the german government had when they went after the journalist who called out the Wirecard fraud. The free market doesn't work if companies are allowed to cheat the system!
They are highly incentivised to reveal genuine fraud and after following their reports for a few years they are incredibly good at it. In my opinion they’re definitely providing a net benefit.
They are some of the only ones I trust to actually discover and report fraud in the market. They have a direct stake on being correct and presenting irrefutable evidence of their claims, because if they are wrong they lose tons of money on their short bets. If they are correct they profit from their short bets and wrongdoing is exposed and punished. How is that contributing nothing to the world? Your whole comment is suspect. Who do you work for?
They only need the share price to drop significantly in short term. I assume they can close their position pretty quickly depending on how market moves. Look at the Adani Group, share price has recovered significantly since Hindenburg report.
> producing "reports" about companies, claiming fraud and manipulation
You say "reports" and "claiming" like there's any evidence that their claims aren't true.
Making extremely public claims like this and taking short positions is something that will easily get you successfully sued by the SEC and the companies you're reporting on...but only if your claims are false.
Can you point to a single example of any of their claims being proven false, or a successful lawsuit against them?
The only difference between an investigative journalist and a libelous liar is the truth - not in their methods or how they make their statements.
In my wildly biased opinion, companies like Hindenburg are leeches that contribute nothing to the world.
While there may be some elements of truth behind their reports, I'd take it with a large helping of salt, given the main objective of this company.