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Nathan Anderson has gained enough notoriety by delving into alleged corporate fraud that he knows may be an unpleasant person at New York parties.
“I don’t drive with, ‘hello, my name is Nate and I’m a short salesman,'” says Hindenburg Research founder. “This is a good way to be kicked out of any party or social environment.”
Anderson has become famous by taking on some of the most popular companies to make himself public in the company’s recent blank check boom, including emerging electric truck companies Nikola and Lordstown Motors.
This week he launched a bomb on the market that already had problems for special purpose acquisition companies through targets DraftKings, the sports betting business is widely regarded as the catalyst for the boom. Shares initially fell more than 11%, but have since largely recovered.
According to Refinitiv, the Spacs are having a record year with more than $ 100 billion raised, but for Anderson the repeated goal of the sector is unintentional. “We don’t really propose and say,‘ Hey, we’ll look at Spacs today, ’” he says, adding that his team “just followed” the apparent fraud.
The 37-year-old, who has formed a small team in Hindenburg with five full-time employees and a handful of contractors, has opted for his livelihood in critical research that he says plays an important role in today’s markets.
“Not all populations deserve to go to the moon,” he says.
Affectionate and sometimes predatory, Anderson grew up in a small Connecticut town and continued to study international business management at the University of Connecticut. Wanting “a more diverse set of life experiences,” she opted for a stay in Jerusalem abroad, where she also volunteered for a local ambulance service, an experience that still reports her focus on the short-term sale.
“As an ambulance doctor, you’re doing everything you can to cure things that break,” he says. In Hindenburg, “we go in and try to shed light on some of these issues that may be lurking in some of these companies, in some of these industries, and see if we can make things better.”
Back in the United States, Anderson worked as a consultant for the financial software company FactSet, which managed client accounts for investment managers, where he realized that “the processes of these companies were virtually the same and not they were especially incisive ”.
They followed the roles of brokerage firms in Washington and New York, including due diligence on hedge funds and investment opportunities. He began to notice possible pyramid schemes and, “fueled by a combination of fascination and terror,” began researching them in his time.
His first big break was when he was trying to hone his research skills. Anderson contacted Harry Markopolos, the researcher known for marking Bernard Madoff’s Ponzi scheme, and they teamed up in a case against Platinum Partners, the hedge fund that eventually charged $ 1 billion in fraud. dollars.
Anderson and Markopolos had not previously been identified as alarms about the case, in which seven top executives were criminally charged and several pleaded guilty.
“He’s a world-class researcher,” says Markopolos, whom Anderson considers a mentor. “If there are facts, you’ll find them, and all too often you’ll find skeletons in the closet.”
At times, having to “work to keep the lights on,” Anderson bolstered his reduced budget by selling portions of his cases to members of a small group of like-minded researchers in exchange for a portion of any payment. He initially went looking for small businesses, but has since taken a big step forward.
“Nikola was his big breakthrough in size and notoriety,” Markopolos says. “He’s in a role and companies are afraid of him.”
Anderson’s appearance comes at a difficult time for short sellers, who have been brutalized by the longest bullish market in history. Even heavyweights like Jim Chanos and David Einhorn have struggled in a market that has run non-stop upwards; others, including Bill Ackman, have stopped betting on companies.
This year has been particularly full, with the emergence of Reddit’s commercial army coming together to increase short-term stocks and for whom short-term sellers are the number one public enemy. Anderson has been the target of countless posts in day traders forums, but he takes it all in stride. “Funding before memes was a lot less interesting,” he says.
One of his favorites is a video depicting Chamath Palihapitiya, the prolific Spac sponsor who made Clover Health public, such as King Kong and Hindenburg, who published a critical investigation of the firm, such as Godzilla. In the clip, “King Kong absolutely surpasses Godzilla’s live tar, and we were like, it’s really well done.”
Other finance professionals, even in the United States, say they like their research. Tony Kypreos, founder of an investment advisory firm that Anderson first met eight years ago, says there are relatively few people who do comparable jobs.
Anderson “is doing a very noble service, because if you show that public companies or private funds publish data that is incorrect, it’s a big problem,” Kypreos said.
The companies run by Hindenburg do not feel exactly the same way, and have disputed or downplayed their allegations, and some claim their reports are a publicity stunt.
Anderson insists he is not completely bitter with blank check vehicles.
“I still have an open mind to the fact that there can be a good Spac,” he says. “I haven’t seen it yet.”
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