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Nathan Anderson was so infamous for alleged company fraud that he knew he might be an unpopular figure at a New York party.
“I don’t say’hello, my name is Nate, I am a short seller,'” said the founder of Hindenburg Research. “This is a great way to get kicked out of any party or social occasion.”
Anderson took over some of the most popular corporate listings in the recent blank check company Monopoly, including electric truck startups Nikola and Lordstown Motors.
This week, he dropped a blockbuster on the market by targeting special purpose acquisition companies that were already in trouble. Draft King, The sports betting business is widely regarded as a catalyst for prosperity. The stock price initially fell by more than 11%, but it has basically rebounded since then.
According to data from Refinitiv, Spacs had a record-breaking year, raising more than $100 billion so far, but for Anderson, repeatedly targeting the industry is unintentional. “We didn’t really start to say,’Hey, we are going to look at Spacs today,'” he said, adding that his team was “just paying attention” to apparent fraud.
The 37-year-old young man established a small team of five full-time employees and a few contractors in Hindenburg. He bet his livelihood on key research, which he said is playing a role in today’s market Important role.
“Not every stock is worth going to the moon,” he said.
Affable but sometimes self-deprecating, Anderson grew up in a small town in Connecticut and continued to study international business management at the University of Connecticut. Wanting “a more diverse life experience”, he chose to study abroad in Jerusalem, where he also volunteered to participate in the local ambulance service-this experience still affects his short-selling methods.
“As an ambulance doctor, you are doing your best to heal the broken things,” he said. In Hindenburg, “we went into and tried to clarify some of the problems that might lie beneath the surface in some of these companies, some of these industries, and see if we can make things better.”
After returning to the United States, Anderson worked as a consultant for financial software company FactSet, managing client accounts for investment managers, where he realized that “the processes of these companies are almost the same, and they are not particularly sophisticated.”
He then held positions in broker-dealer companies in Washington and New York, including conducting due diligence on hedge funds and investment opportunities. He began to notice potential pyramid schemes, and “driven by the combination of obsession and terror,” he began to use his time to study them.
When he tried to hone his investigative skills, his first major breakthrough came. Anderson contacted Harry Marcopolos, an investigator known for labeling Bernard Madoff’s Ponzi scheme, and they jointly filed a lawsuit against Platinum Partners, the hedge fund that eventually charged $1 billion in fraud.
Anderson and Marco Polos had not been confirmed as a wake-up call for the case. Seven executives were criminally prosecuted and several pleaded guilty.
“He is a world-class digger,” said Marco Polos, whom Anderson regarded as a mentor. “If there are facts, he will find them, and he will often find skeletons in the closet.”
Sometimes having to “work hard,” Anderson increased his meager budget by selling some of his cases to a small group of like-minded researchers in exchange for a portion of any expenditure. He initially pursued a small company, but then made great strides.
“Nikola is his breakthrough in scale and reputation,” Marco Polos said. “He did a great job, and the company is afraid of him.”
Anderson’s emergence coincided with a difficult time for short sellers, who suffered the longest bull market in history. Even heavyweights like Jim Chanos and David Einhorn are struggling in a rising market. Others, including Bill Ackman (Bill Ackman), have stopped shorting companies altogether.
This year is particularly worrying. The emergence of the Reddit trading army, they have joined forces to promote short stocks. For them, short sellers are the number one public enemy. Anderson has been the target of countless posts on the day trader forum, but he calmly responded. “Finance before memes was not that interesting,” he said.
His favorite is a video that describes Chamath Palihapitiya (the prolific Spac sponsor who made Clover Health public) and Hindenburg (published a critical study of the company) as Godzillas. In the editing, “King Kong absolutely defeated Godzilla’s live tar, we think this is really good.”
Other financial professionals, even buyers, welcome his research. Tony Kypreos, the founder of the investment consulting firm who first met Anderson eight years ago, said that relatively few people are doing similar jobs.
Anderson “is doing a very noble service, because if you show that a listed company or private fund releases incorrect data, that’s a big deal,” Kypreos said.
The companies Hindenburg targeted did not feel exactly the same. They disputed or downplayed his allegations. Some people claimed that his report was a publicity stunt.
Anderson insisted that he was not completely dissatisfied with blank check vehicles.
“I am still open to the fact that there may be a good Spac,” he said. “I just haven’t seen it yet.”
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