Gautam Adani's Hindenburg Moment
the gas cell is leaking
"The plan is to fan this spark into a flame" - Hindenburg Research probably.
Gautam Adani was the third richest person in the world with a peak net worth of around $142 billion a month ago.
His net worth was $120 billion yesterday before a Hindenburg Research, a short seller firm, released a report accusing the India’s largest tycoon and corporation of improper use of offshore tax havens, allegations of stock manipulation and allegations of accounting malpractices and flagged concerns about its high debt.
Adani Group is an Indian multinational conglomerate, headquartered in Ahmedabad. It was founded by Gautam Adani in 1988 as a commodity trading business, with the flagship company Adani Enterprises. The Group's diverse businesses include port management, electric power generation and transmission, renewable energy, mining, airport operations, natural gas, food processing and infrastructure. Adani Group employs over 100,000 people worldwide. - Wikipedia
Hindenburg said that they held short positions in Adani Group companies (there’s quite a few) through US-traded bonds and non-Indian-traded derivative instruments. They said that they have been working on this report for the past 2 years and spoke to various Adani former executives and employees.
As you would expect, Adani Group denied all allegations, reassured investors and said that it was done with ill intent as the Group was planning to raise $2.5 billion for its public secondary share offering on January 27.
Adani’s rise over the past 3 years has been meteoric to say the least. Forbes shows us that he went from a measly $8.9B in 2020 and all the way up to $142B in 2022 (16x).
For reference, Elon Musk went from $24.6B in 2020 to $320B in 2021 (13x).
I love a good get rich quick and then lose all your money as your fraud is uncovered hero arc story but cmon man. At least try to hide your money through even more shell companies or make it less sus.
The first time I saw Adani 2 years ago when I noticed he entered the top 50 in the Forbes Real Time Billionaires List and was increasing quickly. A simple google search revealed that he was close with Modi and it made sense why he was increasing rapidly in wealth.
If I was smarter, I would have done more research into his companies and realised there was an opportunity to piggyback off of Modi’s friend and profit but I wrote it off as “friend of powerful world leader gets rich” and didn’t think much of it.
For example, here’s a Forbes article talking about his businesses and relations to Modi that was originally published in 2014.
The full Hindenburg report is interesting to read as well.
Well now what?
At the time of writing, the market capitalisation for Adani Group companies have fallen $43 billion and the drama continues. Who needs Netflix when you can watch a multi hundred billion dollar giant get attacked by a random short selling research firm with 5 employees.
But as the grass said “When giants fight, it is the grass that suffers”.
What would be fun is if a GME type situation happens.
Unfortunately, I don’t really have doubt in Indian retail investors + American Billionaire Hedge Fund combo to pull this off but the stock could rise out of nowhere because of government support and uhhh other stuff.
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