What the stock prices of Adani Group are doing well

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What the stock prices of Adani Group are doing well

It was until a few days ago that hardly anyone in the Indian stock market would have known anything about a firm called Hindenburg Research. Today everyone is aware of the New York-based firm's critical report on Adani Group, which has been in the spotlight for its whopping stock price surge in the last year or so.

Hindenburg Research is a firm that specializes in forensic financial research that focuses on issues like accounting irregularities, undisclosed related-party transactions, illegal or unethical business or financial reporting practices, and also undisclosed regulatory or financial issues, among other things.

Nathan Anderson is a Chartered Financial Analyst by qualification and has completed a Chartered Alternative Investment Analyst CAIA course.

Anderson studied at the University of Connecticut and previously worked with firms like FactSet Research Systems, Blue Heron Capital, Tangent Capital and ClaritySpring Inc.

How many companies are targeted by Hindenburg in its reports?

According to the publicly available data on its site, the research firm that claims to unearth man-made disasters floating around the market, has released reports on more than 15 companies until date starting in 2017.

Adani Group, the Indian business conglomerate, was most active in the year 2020 even though there was a global lock down on account of the COVID-19 pandemic.

The research firm has released scathing reports on companies like Nikola, WINS Finance, China Metal Resources Utilization, SC Worx, Predictive Technology Group, SmileDirectClub and Yangtze River Port Logistics.

How are the companies doing well after the Hindenburg reports?

The stock price of the target company was hit by a Hindenburg report more often than not.

In 2020, the firm released reports on as many as seven companies with its report Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America, which grabbed headlines in September 2020.

The research firm claims to have called out a wide variety of lies and deceptions by Nikola in the years leading up to its proposed partnership with General Motors. The founder of the electric truck maker was convicted by a US jury for alleged fraud activities. The stock was trading at around $66 in June 2020 and is currently at $2.77.

In June 2020 it highlighted a non-disclosure related to WINS Finance in the US market and NASDAQ delisted the company four months later because of the non-disclosure highlighted by Hindenburg.

After a report by Hindenburg, the shares of companies like Genuis Brands, China Metal Resources Utilization, Predictive Technology Group and HF Foods have all fallen in the past.

Adani Group stocks Adani Enterprises, Adani Ports Special Economic Zone, Adani Power, Adani Transmission, Adani Green Energy, Adani Total Gas and Adani Wilmar took a huge beating in the last few trading sessions since the Hindenburg report came into the public domain.

The current market price has fallen below the FPO price, which assumes significance due to the fact that a Rs 20,000 crore follow-on public issue FPO of Adani Enterprises is currently on.