NEW DELHI: Hindenburg Research, the US-based firm which previously got embroiled in a high-profile controversy with the Adani Group, has recently decided to cease its operations.
Known for its contentious and aggressive practices, including the controversial short sellings, the firm’s sudden shutdown has sparked debates about the ethics, legality, and motivations behind this unexpected decision.

Ajay Bagga, a market expert and former senior banker, shared his insights with news agency ANI, describing Hindenburg’s business model as operating in a “grey zone.”
Hindenburg’s business model
He said that the firm often published damaging reports about companies while simultaneously taking short positions against them. These activities, he noted, were frequently conducted in partnership with hedge funds that did not disclose their market positions, raising transparency concerns and accusations of market manipulation.
“Short sellers hardly ever make sustained profits. That is why the few who do, as for example in 2008, are celebrated so much. The rest make hardly any returns over the long term,” Bagga said, suggesting that the financial unviability of such a model could have contributed to Hindenburg’s downfall.
Bagga also hinted at the possibility of regulatory pressure being a factor. It is speculated that legal scrutiny or the threat of penalties may have prompted Hindenburg to shut down quietly.
The expert also hoped that accountability is ensured to prevent such practices in the future, in case regulatory or legal proceedings are underway.
‘Predatory approach’
Hindenburg Research gained much attention for publishing damaging reports on companies, often harming their market value and reputation. While the firm marketed itself as a truth-seeking watchdog, critics accused it of being a financially motivated entity that prioritised profit over ethical considerations.
Unlike traditional short sellers who rely on fundamental analyses or activist investors pushing for corporate reforms, Bagga described Hindenburg’s approach as “predatory.”
Ethics and regulations
He noted, it was not like the traditional shorts sellers who were based on fundamentals. Short sellers help in market integrity and depth; however, hatchet jobs destroy value all around”.
Bagga further added “Any market benefits from different perspectives and from deep analysis. However, a coordinated attack with positions being taken by selectively informed hedge funds lies in a grey area.”
He said that many markets have officially banned short selling from time to time during the economic crisis, while Hindenburg’s practices lie in the gray area.
The closure of Hindenburg Research has reignited discussions on the ethical and regulatory boundaries of short selling.