Open Editor’s Digest for free

Rula Khalaf, editor of the Financial Times, selects her favorite stories in this weekly newsletter.

Activist short-trader Nathan Anderson, best known for his campaigns against Adani Group, Super Micro and Nikola, is shutting down his company Hindenburg Research seven years after founding it.

“The plan was to finish after we finished the series of ideas we were working on,” Anderson said he wrote in a statement. He described the mission as “fairly intense and, at times, exhaustive.”

Anderson became one of Wall Street’s most prominent short-selling activists, known for his meticulously detailed reports and relentless pursuit of companies he alleged were committing fraud.

His rise came at a time when many of his peers were losing ground, held back by a decade-long bull market and the growth of passive investment funds that made it difficult to go against the grain.

Famed short-seller Jim Chanos told investors he would close his concentrated short funds in November 2023 after more than three decades in the industry while Bill Ackman, famous for his costly campaign against Herbalife, has sworn off the practice altogether.

Activist short selling is a very difficult business and is usually avoided by major Wall Street institutions. Smaller players tend to use balance sheet arrangements with a partner Hedge funds They get a portion of the fees but they are the face of public campaigns.

Hindenburg worked with a small New York-based firm called Kingdon Capital on the project Number of deals.

This practice can also be legally risky. Last year, US regulators charged Andrew Left, a short seller who founded Citron Research, with fraud over alleged market manipulation. He has pleaded not guilty, and the trial is scheduled for September.

Despite all the challenges, proponents argue that short selling is necessary to balance out the market euphoria.

Hindenburg He was prolific, often targeting several large companies at once, a level of intensity that seems to have become too much for Anderson. “This has come at the cost of losing so much of the rest of the world and the people I care about,” he wrote in a letter published on Wednesday. “It wasn’t always clear to me, but now I see it all as a love story.”

Hindenburg’s last published report was issued at the beginning of the year and focused on online auto retailer Carvana.

Anderson is best known for a report against electric truck company Nikola, which at the time was a darling of booming companies being taken public through shell companies known as special purpose acquisition companies.

The report included an infamous video of a truck rolling down a slope and led to founder Trevor Milton being found guilty of fraud as well as a $125 million fine paid by the company.

The case attracted significant media attention and brought Anderson a large following who eagerly anticipated the Hindenburg’s reports and speculated about her possible next targets.

Hindenburg’s research has led to fraud charges and indictments against dozens of individuals, according to its website, but it has also led to costly legal battles. The company had only 11 employees.

Hindenburg also relied on unconventional research methods.

When she investigated a suspected Ponzi scheme in 2022, she outfitted a private plane with equipment to secretly record a company representative making an offer to a Hindenburg employee.

Anderson began his work investigating corporate misconduct by targeting hedge funds. In 2014, he filed his first whistleblower report with the SEC, according to Hindenburg’s website.

Anderson faced off against some of Wall Street’s most famous investors, including fellow activist Carl Icahn. A 2023 Hindenburg report published by Icahn Shares sent The company’s shares fell by 20 percent and forced the billionaire to restructure his personal loans.

“We have all worked extremely hard, focusing on accuracy and letting the evidence dictate our words,” Anderson wrote in Wednesday’s announcement. “Sometimes that meant making big swings and fighting battles far bigger than any of us as individuals.”

Anderson’s parting gift to his followers was a YouTube link to a DJ set playing in Bali. “She had a huge impact on me at a pivotal time,” he wrote.