London-based hedge fund Odey Asset Management will break itself up, it said in a letter to investors Thursday.
Its founder Crispin Odey was accused of sexual harassment by 13 women in a Financial Times investigation published last week.
JPMorgan and Morgan Stanley both cut ties with the asset manager after the allegations broke.
Carl Icahn’s business empire just became Hindenburg’s latest target. Here are some of the short seller’s other big bets.
Hindenburg Research disclosed a short position against Carl Icahn’s business empire this week.
Icahn Enterprises plunged 20% the day the short-seller released its bombshell report.
From Indian conglomerate Adani to EV company Nikola, here are Hindenburg’s biggest bets.
Hindenburg Research hit the headlines this week when it unveiled a short position against billionaire Carl Icahn.
The activist investor published a report Tuesday that alleged the Wall Street legend’s holding company Icahn Enterprises had used inflated asset values and been run like a Ponzi scheme.
Hindenburg’s latest big short follows the high-profile wagers against Indian conglomerate Adani and Jack Dorsey’s digital payments firm Block it made earlier this year.
Here are some of the short seller’s biggest bets from the past three years.
1. Nikola Corporation
In September 2020, Hindenburg released its first report on Nikola Corporation, saying that the electric truck manufacturer had exaggerated and misrepresented its products to investors.
Shares plunged 11% in a single day and at last check had cratered to just $0.90 – more than 95% below the level they traded at the week Hindenburg first disclosed its short position.
The company’s founder Trevor Milton was also convicted of fraud in October 2022 after he was found to have lied about Nikola’s technology to drive up its share price, as Hindenburg had alleged two years earlier. He’s due to be sentenced in June 2023.
2. Clover Health
Hindenburg’s next high-profile target was was Medicare Advantage insurance provider Clover Health, which it attacked just one month after it had listed on the Nasdaq.
The short-seller said in a report published in February 2021 that Clover – as well as its “Wall Street celebrity promoter” Chamath Palihapitiya, who took the company public via a SPAC merger – had misled investors in the run-up to its listing by failing to inform them the Department of Justice was investigating it.
Clover shares dropped 8% the day Hindenburg released its report and like Nikola, have fallen around 95% since the short-seller made its first attack.
The activist investors questioned the sports-betting firm’s valuation compared to its rivals and also alleged that Bulgarian company SBTech, which it had merged with as part of its own SPAC listing, generated significant amounts of revenue from questionable gambling practises in overseas markets, including Asia.
DraftKings shares plunged 4% lower the day of Hindenburg’s report and have crashed another 55% since then, trading at just under $22 at last check.
4. Twitter
Elon Musk bid to take Twitter private for $54.20 a share in April 2022 – and one month later, Hindenburg disclosed a short position in the social media giant.
The activist investor predicted that Musk would be able to renegotiate that deal to a lower price after Twitter posted poor quarterly results and the world’s second-richest man said he’d sell his existing 9.2% stake if his takeover offer wasn’t accepted.
Musk later changed his mind again in October and bought Twitter at the originally-agreed price of $54.20 a share, at which point Hindenburg sold all its shares.
5. Adani Group
6. Block
In March, Hindenburg released a report on Twitter founder Jack Dorsey’s payments platform Block, which it said had overstated its user numbers and helped to facilitate fraud.
Block shares plunged as much as 22% the day the report was released but have traded roughly flat since then, with the tech company dismissing the claims and saying it’ll pursue legal action via the Securities and Exchange Commission.
7. Icahn Enterprises
8/8 SLIDES
Embattled Odey Asset Management is to break itself up after high-profile Wall Street names JPMorgan and Morgan Stanley cut ties with the London-based hedge fund in the wake of a string of sexual harassment allegations against its founder.
Load Error
The asset manager said in a letter to investors Thursday that it would shift its funds and certain employees to other investment groups, with its business “affected by recent events”.
The firm’s founder Crispin Odey was accused of sexual harassment or assault by 13 women in a Financial Times investigation published last week.
Odey told the FT that the allegations were “rubbish” when reached by phone, while a law firm representing him later said he “strenuously disputed” the 13 women’s claims.
Investment powerhouses JPMorgan, Morgan Stanley, and UBS have all since cut ties with the hedge fund, whose executive committee said on June 10 that Odey would no longer be involved with the company he founded in 1991.
The Financial Conduct Authority, the UK watchdog for financial services sector is also understood to be preparing to launch an investigation into Odey in the wake of the FT’s report, according to multiple publications.
Odey was known for taking bearish stances on the global economy, particularly in making several high-profile bets against the British pound.
He shorted sterling ahead of the UK leaving the European Union – despite having been a prominent backer of Brexit.
