- Adani Group companies have lost more than $110 billion in market value over the past two weeks.
- That’s after US short-seller Hindenburg Research leveled allegations of market manipulation and fraud at the conglomerate.
- These losses exceed those of other short-selling targets such as Enron and Wirecard.
Few companies have lost vast amounts of market capital more quickly and to such an extent than those belonging to the Adani Group.
Ten publicly traded companies under the Adani Group have already lost more than $110 billion as of Friday after being attacked by short-seller Hindenburg Research. bloombergThese losses outweigh the market capital lost by other targets in short-selling attacks.
The Adani Group’s loss was far greater and quicker than the bloodshed of Houston-based energy trading giant Enron and German payments firm Wirecard. Bloomberg analysis Published on Friday. Enron is gone Wirecard is currently insolvent.
Enron was unloaded — in part — by renowned short-seller Jim Chanos at hedge fund Kynikos Associates. Chanos shorted the company’s shares after pointing out fraudulent accounting practices. Bloomberg records show that Enron lost more than $65 billion in Chapter 11 bankruptcy filings from August 2000 to December 2001.
For Wirecard, it was Fraser Perring who sold short. 2016 report, accused the payment company of money laundering and fraud. Wirecard’s stock price plummeted after the company made his June 2020 reveal. $2 billion in cash ‘missing’ From its balance sheet, it probably didn’t exist. In the same month, he filed for bankruptcy. Wirecard’s market value was wiped from he €24 billion ($26 billion) in 2018.
Other companies that have been targeted for short-selling and lost real market value include electric truck makers Nicola — Its market value has fallen from a 2020 high of about $30 billion to its current $1.3 billion — and Valiant Pharmaceuticals. The latter’s market cap has fallen from $87 billion in August 2015 to around $2.8 billion today.
Nikola, in particular, was also targeted by the Hindenburg Institute. US-based short sellers have targeted about 30 companies since 2020, according to Bloomberg. These stocks averaged about 15% off the day after they were targeted, and an average of 26% six months later, according to news agency calculations.
Meanwhile, Adani Group has been hard at work troubleshooting. On January 29th, 413 page report It defends itself against Hindenburg’s allegations — just three days after it said it was considering potential legal action against short sellers.
The conglomerate said in a report it sought to restore investor confidence by prepaying a $1.1 billion loan. statement on monday. It said the move was made “in view of recent market volatility.”
And it seems to be working – most Adani Group stocks seem to have been lifted by the news.
Conglomerate flagship Adani Enterprises jumped 20% in less than two hours of trading on Tuesday, while Adani Ports and Special Economic Zone deals jumped more than 9%. Stocks of Adani Transmission, Adani Green Energy and Adani Power also rose. Shares of Adani Total Gas fell 5%.