In October 2024 the popular children’s game ‘Roblox’ – created by David Baszucki and Eric Cassel – was hit by a so-called ‘bombshell report’ that labelled it an ‘overvalued’ ‘paedophile hellscape’ by a company called ‘Hindenburg Research’. (1)
‘Hindenburg Research’ are a recent creation having only been founded in 2017 by Nathan Anderson and specialise in publishing allegations about companies that they claim are overvalued and/or ‘going to blow up’ ‘at some point’ so they can be shorted by hedge funds and other financial speculators with Hindenburg Research taking a cut of the profits via the latter’s ‘partnership scheme’.
As Bloomberg explains:
‘To the companies he attacks, what Nathan Anderson does for a living is unethical, even immoral. But to most Wall Street professionals, he provides a necessary service by highlighting potentially overhyped companies and ensuring that markets do their job. Whether they consider him a vulture or a savior, they all agree that Anderson and his firm, Hindenburg Research, are good at what they do: taking companies down and making money from it.
Anderson is what’s known as an activist short seller. He exposes accounting discrepancies and alleged wrongdoing in scathing reports that journalists quote liberally in articles that often spur government investigations, all with the goal of nudging investors to sell. He typically works closely with deep-pocketed investors who place short bets—borrowing shares and selling them back at a profit when the price declines—alongside his.
Since he incorporated Hindenburg in 2018 from an apartment in New York, Anderson has targeted dozens of companies, but most have been small and had US-only footprints. Named for the ill-fated zeppelin, Hindenburg says its mission is to point out “man-made disasters” that are bound to blow up. Then it speeds the process along. On average, targeted company stocks fell about 15% the day after Hindenburg’s negative report appeared and were down 26% six months later, according to calculations by Bloomberg News. Now Anderson is gunning for one of India’s biggest conglomerates, a group of companies controlled by Gautam Adani, until recently Asia’s richest man, who’s perceived to have close ties to Indian Prime Minister Narendra Modi. It’s a huge gamble—and it appears to have paid off.
Hindenburg, which now employs about a dozen people, isn’t a hedge fund. It prefers to be known as a forensic research outfit that operates with its own capital. Yet on prior projects, it’s taken on partners as investors, who take advantage of Hindenburg’s coming bombshell before it explodes. Joshua Mitts, a corporate and securities law professor at Columbia University, says it’s “very common” for activist short sellers to have partners who take positions on their behalf. Partners typically get an advance look at the research so they can have their shorts in place. If the ploy succeeds, Hindenburg takes a cut of the profits.’ (2)
Now to summarise this in the simplest possible terms Hindenburg Research identifies a company that is floated on a stock market that it thinks is arguably over-valued or has some issue that might impact its value in the future, Hindenburg Research produces a report based on this which is shared some time before official publication with its ‘partners’ (Hedge Funds etc), the ‘partners’ decide whether to take out a short position on the company’s stock, Hindenburg Research releases the report which then gets picked up by the financial news, the target company’s stock positions is substantially impacted and then the ‘partners’ short position makes them a large amount of money a percentage of which is paid to Hindenburg Research as their fee.
This sounds illegal but is in fact not and is a form of legal insider trading/market manipulation often called ‘buy on rumours, sell on news’ (aka ‘News Trading’) where-in you manipulate human behaviour and then exploit it to make money betting on an issue that you yourself have created. The ‘out’ in this for Hindenburg Research is the fact that their claim has to be arguable and ‘backed by data’ (remember ‘lies, lies and damned statistics’) and then it becomes okay.
Hindenburg Research’s attack on Roblox is largely based upon claims that it has a ‘widespread paedophile problem’ and thus will turn out to be bad investment once this gets ‘properly exposed’. (3) This sounds like superficially decent reason until we realise that Hindenburg Research isn’t trying to short Meta’s Facebook which has a long-running and much worse ‘paedophile problem’ (4) compared to Roblox’s relatively minor one with Roblox having circa 24 arrests in the United States for paedophilia since 2018 linked to it (5) versus an estimated 100,000 children a day receiving ‘sexual requests’ on Facebook. (6)
Hindenburg Research’s problem then isn’t with paedophilia nor is it about shorting companies that might have upcoming paedophilia scandals per se, because if they were truly interested in shorting such companies than Meta’s Facebook is an obvious target but yet they are targeting Roblox instead.
Roblox’s spokesperson suggested just this when they responded to ‘Fortune’ that:
‘We totally reject the claims made in the report. The financial claims made by Hindenburg Research are simply misleading. The authors are, admittedly, short-sellers and have an agenda irrespective of the substance of Roblox’s business model and results.’ (7)
I would suggest that the real reason is that Roblox’s user base is incredibly critical of jews and Israel with so-called ‘extremists’ allegedly ‘recruiting’ and ‘spreading anti-Semitism’ on it, (8) but Roblox has been too tardy and insufficiently radical in the view of jewish media outlets such as ‘Jewish News’ and the ‘Jewish Chronicle’. (9)
But how does that connect with Hindenburg Research you might ask?
Well Nathan Anderson just so happens to be jewish – (10) in his own words ‘way more jewish than my last name implies’ – (11) and actually went to university in Israel. (12)
So, what better way to take down or neuter a major vector for ‘anti-Semitism’ than to claim it is a ‘paedophile hellscape’, trigger a moral panic (13) and make a hefty profit in doing so without directly linked your attack on Roblox to its ‘problem with anti-Semitism’ in a similar strategy as has been systematically used against popular Chinese social media app TikTok.
References
(1) https://fortune.com/2024/10/09/roblox-hindenburg-research-report-pedophile-hellscape/
(2) https://www.bloomberg.com/news/articles/2023-02-09/hindenburg-research-adani-paper-boosts-nathan-anderson-s-name
(3) https://fortune.com/2024/10/09/roblox-hindenburg-research-report-pedophile-hellscape/
(4) For example: https://futurism.com/the-byte/facebook-pedophilia-problem; https://www.bbc.com/news/technology-39187929; https://www.wsj.com/tech/meta-facebook-instagram-pedophiles-enforcement-struggles-dceb3548; https://www.theguardian.com/technology/2020/mar/04/facebook-child-exploitation-technology; https://www.theguardian.com/global-development/2024/jan/31/meta-worlds-single-largest-marketplace-for-paedophiles-new-mexico-attorney-general-facebook-instagram
(5) https://www.bloomberg.com/features/2024-roblox-pedophile-problem/
(6) https://www.theguardian.com/global-development/2024/jan/31/meta-worlds-single-largest-marketplace-for-paedophiles-new-mexico-attorney-general-facebook-instagram
(7) https://fortune.com/2024/10/09/roblox-hindenburg-research-report-pedophile-hellscape/
(8) For example: https://www.bbc.com/news/technology-58600181; https://aish.com/stop-ignoring-antisemitism-in-video-games/; https://www.thejc.com/news/childrens-game-roblox-features-nazi-death-camps-and-holocaust-imagery-ddzzz1lg
(9) For example: https://www.jewishnews.co.uk/roblox-doing-all-it-can-to-tackle-proliferation-of-antisemitic-content-on-platform/; https://www.thejc.com/news/childrens-game-roblox-features-nazi-death-camps-and-holocaust-imagery-ddzzz1lg
(10) https://in.mashable.com/culture/46265/who-is-nathan-anderson-the-man-behind-the-explosive-hindenburg-expose-on-adani-conglomerate
(11) https://www.quora.com/profile/Nate-Anderson-1
(12) https://www.freepressjournal.in/business/meet-adanis-nemesis-and-hindenburg-founder-nathan-anderson
(13) For example: https://www.theguardian.com/technology/2024/oct/15/roblox-allegations-ofcom-online-safety-act