In January 2023, short-selling firm, Hindenburg Research, released a report that accused India’s Adani Group and its founder, Gautam Adani, of stock manipulation. This led to a massive $140 billion drop in market value. It was later revealed that New York Hedge fund Kingdon Capital funded the short position on Adani, earning $22 million and Hindenburg receiving 25% of the profit. This scenario raised concern about “activist short selling” where researchers collaborate with hedge funds to target potential fraud. While some believe these efforts help uncover market fraud, critics argue they can manipulate markets by fueling fear and uncertainty. This practice of short selling has come under major scrutiny, with the SEC and DOJ investigating undisclosed financial agreements between short-sellers and hedge funds. https://www.ft.com/content/8b3261c9-f42f-4896-a2cb-89b83f4d2b6d
Hedge Funds and Activist Short Sellers
