Business

Nathan Anderson, the Hindenburg founder who takes over the Spacs

Nathan Anderson has achieved quite a bit of notoriety digging into alleged corporate fraud knowing that he may be an ungrateful person at New York parties.

“I don’t drive,” hello, my name is Nate and I’m a short salesman, “says founder Hindenburg Research.” It’s a pretty good way to be expelled from any party or social environment. ”

Anderson has made a name for himself by taking on some of the most famous companies to go public in the company’s recent boom in white checklists, including electric truck startups Nikola and Lordstown Motors.

This week he dropped a bomb on the market already fighting for acquisition companies for particular purposes targeting DraftKings, the sports betting business widely regarded as the catalyst for the boom. Shares initially fell more than 11 percent but have since largely recovered.

Spacs has had a record year with more than $ 100bn raised so far, according to Refinitiv, but for Anderson the repeated targeting of the sector is involuntary. “We’re not parties and we say,‘ Hey, let’s watch Spacs today, ’” he says, adding that his team “just followed through” with apparent fraud.

The 37-year-old, who has built a small team in Hindenburg with five full-time employees and a handful of entrepreneurs, has highlighted his livelihood for critical research that he says serves an important role in today’s markets. .

“Not all stocks deserve to go up on the moon,” he says.

Affectionate and sometimes self-deprecating, Anderson grew up in a small Connecticut town and continued to study international business management at the University of Connecticut. Wanting “a more diverse group of life experiences,” she opted for a stint studying abroad in Jerusalem where she also volunteers for a local ambulance service – an experience that always informs her approach to short selling.

“As an ambulance doctor, you try to do your best to heal things that are broken,” he says. In Hindenburg, “we go in and try to shed light on some of these problems that might be lurking beneath the surface of some of these companies, in some of these industries, and see if we can improve things.”

Back in the US, Anderson took a consulting job with financial software company FactSet which manages client accounts for investment managers where he understood “the processes in these companies were practically the same, and not particularly incisors “.

Roles in broker-dealer ventures in Washington and New York continue, including due diligence on hedge funds and investment opportunities. He began to notice potential pyramid schemes and, “fueled by a combination of fascination and horror,” began to search for his time.

His first big break came while trying to hone his investigative skills. Anderson contacted Harry Markopolos, the investigator known for Bernard Madoff’s Ponzi scheme, and they met in a case against Platinum Partners, the hedge fund eventually accused of more than $ 1 billion in fraud.

Anderson and Markopolos have not been previously identified as sounding the alarm over the case, in which seven senior executives were criminally charged and several pleaded guilty.

“He’s a world-class digger,” says Markopolos, whom Anderson considers a mentor. “If there are facts, you will find them and too often you will discover that there are skeletons in the closet.”

At times having to “work to keep the lights on,” Anderson reinforced his meager budget by selling part of his homes to members of a small group of researchers in the same way in exchange for a portion of any payments. Initially he went after small companies, but he has since taken his step.

“Nikola has been his breakthrough in size and notoriety,” Markopolos says. “He’s in a role and companies are afraid of him.”

Anderson’s emergence comes at a difficult time for short sellers, who have been brutalized by the longest-running bull market in history. Even heavyweights like Jim Chanos and David Einhorn have struggled in a market that is steadily rising high; others, including Bill Ackman, have stopped betting against companies.

This year has been particularly busy, with the emergence of the Reddit trading arm coming together to bolster shorted stocks and for which short sellers are the number one public enemy. Anderson has been the target of countless posts on the forums of today’s traders, but he takes it all in his stride. “The finance before the memes was much less interesting,” he says.

One of his favorites is a video depicting Chamath Palihapitiya – the prolific Spac sponsor who made Clover Health public – as well as King Kong and Hindenburg, who publish critical reviews of the company, such as Godzilla. In the clip, “King Kong absolutely beats the tar down out of Godzilla, and we were like, it’s really well done.”

Other finance professionals, even in the buyside, say they welcome their research. Tony Kypreos, founder of an investment firm that met Anderson for the first time eight years ago, says there are relatively few who do a comparable job.

Anderson “does a very noble service, because if you’re showing that public companies or private funds put data that is wrong, it’s a problem,” Kypreos said.

The companies chosen by Hindenburg do not feel exactly the same way, and have disputed or downplayed their allegations, with some saying their reports are an advertising stunt.

Anderson insists it is not complete for blank vehicles.

“I always kept my mind open to the fact that there could be a good Spac out there,” he says. “I haven’t seen it yet.”


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