The Lagos financial community is on fire right now at the audacity and ease with which Financial Research company allegedly operating behind a laundry on Coopers Street, Yonkers, New York, managed to use lies an innuendo to smash after Jumia and Opera, the price of another African tech giant, Tingo Group (TIO:Nasdaq) and run off into the darkness with over $100mn. The US Regulators were impotent and could not stop them from doing it or apparently from even striking again.
That research firm publishes the Hindenburg Report, run by money tycoon Nathaniel Anderson aka the Hindenburg Hustler specializes in a technique known as “short and distort,” in which he bets the price of a booming stock will collapse and then pretends to be an independent arbiter but instead pays keyboard warriors to attack chatrooms to discredit companies with fabricated evidence, fake pictures, Ai distortions, and outright lies until their price collapses. He and his billionaire buddies who back him then pocket the money. A fool and his money is soon parted, is their motto.
They are so brazen that they can do this at least ten times a year, pocketing hundreds of millions of dollars. This year to make a statement and prove their power over Wall Street, they attacked Carl Icahn, the banker in the original Oliver Stone movie “Wall Street,” played by Michael Douglas, was based on. They named and shamed him in a gross public display to show that Nathan was the new King of New York.
Carl Icahn, the old icon of the GREED IS GOOD 1980s, was left spluttering:
“Hindenburg Research, founded by Nathan Anderson, would be more aptly named Blitzkrieg Research given its tactics of wantonly destroying property and harming innocent civilians. Mr. Anderson’s modus operandi is to launch disinformation campaigns to distort companies’ images, damage their reputations and bleed the hard-earned savings of individual investors.”
All fun and games for the comfortable US bankers, but the consequences are deadly severe here in Africa. Tingo provides a mobile phone and how 11 million farmers buy seeds and fertiliser and sell their crops, fruit, and vegetables with VISA and AFAN (government co-operative organisation). Many Tingo farmers are in states badly harmed by climate change. Many rely on, and their families and their communities depend on Tingo. When the Hindenburg Hustler sneezes, Africa catches Covid.
Tingo is one of the few commercial enterprises that can operate in our troubled North East and has done throughout the conflict providing a source of income and communication to many who are isolated or displaced. When there is no marketplace, their children need healthcare and education; they can’t just slip out of their Manhattan office for a cup of Joe and a double burger at the Inwood Grill.
The Nathans of New York do not care how Africa has relied on our African technology entrepreneurs, from Mo Ibrahim to Strive Masiyiwa, to pull our continent out of endemic poverty. Mobile money had transformed financial inclusion in Africa and occurred a decade before it appeared in the States. Africa can be a leader. The digital transformation of Africa is rapidly closing the gender gap and reducing poverty for all.
In December 2022, the United States launched the Digital Transformation with Africa Initiative (DTA). The US government pledged about $800mn, much less than the value the Hindenburg Hustler destroyed in African technology companies in days. Suppose the US is serious about Africa’s digital transformation. In that case, it should use its enforcement bodies to act swiftly and close down these “short and distort” bucket shops that rely on the unconscious racial bias of many of its financial institutions to attack with impunity foreign companies who seek a listing on markets such as NYSE and Nasdaq that are promoted as being global.
The US capital markets should not portray themselves as concerned about ESG matters or the United Nations’ unique development goals if they can not control the criminal activities of the Hindenburg Hustler operating a 20-minute drive away from the UN headquarters in New York. In the Ai age, anyone can fabricate information and then, as Nathan Anderson does, hide behind the free speech First Amendment. Any robust institutional governance should ensure that people like him are regulated.
And they should do this not just because of the outsized effects his greed is good mentality has on ordinary Africans but also to protect those hard-working Americans who invest pensions and savings to make it through their old age in the market. Hindenburg does what it does for secretive billionaire buddies. Don’t think he gives a damn about smashing ordinary Americans to the curb for a second.
But if the regulators can not control Hindenburg (and Gary Gensler, boss of the US Securities and Exchange Commission, is promising to deal with the short and distorters soon), then what can Tingo and other African tech companies who wish to go to the US for capital market support, do to protect themselves.
Tingo did well by calling for an independent inquiry within 48 hours of the abusive attack by Nathan Anderson. They went to one of the world’s most prominent law firms, White & Case. Founded in 1901 and ranked among the top law firms globally by revenue. It is their job to look at the allegations and make recommendations to the board of Tingo. Hopefully, they will force Nathan Anderson to reveal who his billionaire buddies are and thereby expose the criminal conspiracy surrounding him.
Those companies that have escaped the clutches of the Hindenburg Hustler include Bloom Energy, the green energy provider. Hindenburg alleged that there were undisclosed servicing liabilities that the market had overlooked and predicted that Bloom Energy was heading toward bankruptcy. Within two years of the report, the company had more than doubled its share price.
In March 2021, Hindenburg Research accused Ormat Technologies, Inc. of engaging in widespread and systematic acts of international corruption. Around this time, their share price moved wildly. In a short time, having thrown off these allegations, the renewable energy provider carried on as usual, with its share price stable ever since.
In December 2021, Hindenburg Hustler published a report alleging that Technoglass Inc had Suspicious sales and acquisitions involving undisclosed related-party customers. They also alleged ownership of these related-party customers by family members of Technoglass’ CEO and COO. There were also accusations of significant connections to a cocaine cartel, resulting in criminal allegations. Since these reckless or fraudulent accusations by Hindenburg, the share price of Technoglass has tripled.
Such criminal activity against so many foreign participants from Africa, India, China, and Europe can exist and thrive at the center of the world’s largest economy, and then hide behind that economy’s constitution is astounding. A potential recourse would be by our government or the African Union to the World Bank or IMF’s Financial Sector Assessment Program, which can sanction America for allowing this to occur.
The only thing necessary for the triumph of evil is for good men to do nothing, which is often quoted in instances where guys like Nathan Anderson and his billionaire buddies but Nigeria can no longer expect the good guys in the USA to do anything. We have to stand on our own two feet and protect our own. Within 25 years, we will have a population bigger than the USA. So it is time for Nigeria to draw the line and say no longer will you bully our companies, belittle our leaders, or impoverish our people.