Hindenburg nabs tiny gains off $173 bn carnage, wipes out $99 bn of wealth

Gautam Adani, Jack Dorsey, Carl Icahn. Nate Anderson has picked them off one by one.

In mere months this year, he erased as much as $99 billion of their combined wealth while knocking $173 billion off the value of their publicly traded companies. In an era when prominent short sellers have retreated from the limelight — fretting lawsuits, short squeezes and government probes — the deft researcher has emerged as the gutsiest bear around. Allies say he’s risking civil suits, physical attacks and potentially even overseas arrest.

The surprise is that Anderson, 39, who runs tiny Hindenburg Research with a team of roughly a dozen researchers, probably reaped relatively small profits from those fights.

Take his report on May 2, accusing Icahn’s holding company, Icahn Enterprises, of overvaluing assets. Within four weeks, the stock’s plunge erased $17 billion of the billionaire’s wealth. Yet the combined gain for all investors who shorted the shares before the report would have been about $56 million if they timed their exits perfectly, according to data from S3 Partners. And that’s not counting the cost of setting up the bets.

In going after Adani’s empire, Anderson shorted bonds. Veterans steeped in that market say it would’ve been so difficult to build a sizable position that he probably notched a smaller gain.

And his bet against Dorsey’s payments venture, Block Inc, may have been even more modest, based on market data.

While Anderson declined to comment for this story, the few interviews he has previously granted and his talks with confidants — who agreed to speak on the condition they not be identified — make clear that money isn’t his main motivator.

The investor, who lives in a two-bedroom luxury apartment he rents in Manhattan, has said he makes a “very good living.” What drives him is exposing what he sees as misbehavior and knocking down companies he deems offensively overblown. One competitor calls it the classic mindset of a short seller: A compulsion to understand how the world is screwed up and call it out.

This year has brought Anderson an unusual amount of attention. In January, he rattled international markets by going after the Adani Group — 10 publicly traded companies run by the man who was then the world’s fourth-richest. Adani Enterprises, the conglomerate’s flagship, lost about half of its market value in days. In late March, Anderson shorted Block, which tumbled more than 16 per cent  by the end of that week.