Short seller action can have a substantial impact on a stock. However, one is often left wondering if the effort is worth the reward? In the case of Hindenburg Research, the answer is – maybe not so much.
Last year, Hindenburg’s short-seller report on Indian conglomerate Adani Group was one of the most impactful short reports ever. Hindenburg’s bombshell allegations led to a massive $153 billion market value wipeout in Adani Group companies at the time. But Hindenburg’s gains from last year’s short on Adani were relatively tiny.
How Much Did Hindenburg Make from Its Adani Short?
As it turns out, Hindenburg pocketed just around $4 million from its short bet against Adani. The research house is also facing an investigation from Indian regulators. While Adani Group shares have gradually recovered since Hindenburg’s report, the group’s mark valuation still remains nearly $30 billion lower as compared to its pre-Hindenburg levels.
Meanwhile, Indian securities regulator SEBI (Securities and Exchange Board of India) has issued a show cause notice to Hindenburg, alleging misrepresentations and inaccurate statements in its Adani report. Importantly, SEBI has also cited U.S. hedge fund Kingdon Capital as an involved party.
According to the regulator, Kingdon was aware of Hindenburg’s report before it was published and had a profit-sharing pact with Hindenburg. Hindenburg, in its response, noted that its work on Adani was not gainful from a financial perspective, but it is proud of the research it performed on Adani.
Hindenburg’s Latest Target
Meanwhile, shares of Axos Financial (NYSE:AX), the latest name to pop up on Hindenburg’s radar, have recovered by nearly 15% since Hindenburg’s short report against the company was released nearly a month ago.
What Is the Price Target for AX?
Overall, the Street has a Strong Buy consensus rating on the stock, alongside an average AX price target of $70.
Read full Disclosure
