- Adani Group companies have lost over $110 billion in market value in the past fortnight.
- That's after US short seller Hindenburg Research leveled allegations of market manipulation and fraud at the conglomerate.
Very few companies have $4 as swiftly and to such an extent as those belonging to the Adani Group.
Ten listed companies under the Adani Group — which came under attack by short seller Hindenburg Research — have already shed more than $110 billion as of Friday, per $4. These losses eclipse the market capital lost by other targets of a short seller's attack.
Adani Group's losses were significantly larger and swifter than the bloodshed at Houston-based energy trading giant Enron and German payments company Wirecard, which were also mired in accounting scandals before they collapsed, according to a $4 published on Friday. While Enron has ceased to exist, $4.
$4 was $4 — in part — by famed short seller $4 of hedge fund Kynikos Associates. Chanos shorted the firm's stock after flagging fraudulent accounting practices. Enron lost more than $65 billion between August 2000 and December 2001 when it filed for Chapter 11 bankruptcy, per Bloomberg's record.
In Wirecard's case, it was short seller $4 who in a $4, accused the payments firm of money laundering and fraud. Wirecard's share price collapsed after the company revealed in June 2020 that $4 from its balance sheet and likely never existed. It filed for insolvency in the same month. Wirecard's market value was wiped out from 24 billion euros, or $26 billion, in 2018.
Other companies that have lost substantial market value after being targeted by short sellers include electric truck maker $4 — its market value fell from a high of around $30 billion in 2020 to $1.3 billion now — and $4 The latter's market cap fell from $87 billion in August 2015 to around $2.8 billion now.
Nikola, in particular, was also targeted by Hindenburg Research. The US-based short seller has targeted about 30 firms since 2020, per Bloomberg. These stocks lost about 15% on average the day after being targeted, and were on average 26% lower six months later, according to the news outlet's calculations.
On its part, the Adani Group has been troubleshooting hard. On $4 it released a $4 defending itself against Hindenburg's allegation — just three days after saying it was $4 against the short seller.
They even sought to restore investor confidence by prepaying $1.1 billion in loans, the conglomerate said in a $4 on Monday. It said the move was made "in light of recent market volatility."
And it seems to be working — most Adani Group-related stocks appeared to be lifted by the news.
The conglomerate's flagship company, Adani Enterprises surged 20% in under two hours of trade on Tuesday, while those of Adani Ports and Special Economic Zone soared over 9%. Shares of Adani Transmission, Adani Green Energy, and Adani Power were also up. The shares of Adani Total Gas were 5% lower.