What’s Short Selling and Who Is Hindenburg Research?

If you buy low then sell high, chances are you’ll be richer and everybody will be happy. But reverse the trades with borrowed stock — what’s known as short selling — and you may be rich, but odds are that quite a few people will be displeased. Critics say that short sellers distort the market and that their practices can blur into market manipulation. “Shorts” say they’re keeping markets and companies honest. A series of negative reports from a short-selling firm, Hindenburg Research, have added fuel to the fire, as it targeted Carl Icahn’s Icahn Enterprises LP and companies affiliated with Indian billionaire Gautam Adani and Twitter co-founder Jack Dorsey.

Short sellers borrow shares, sell them, buy them back at a lower price and profit from the difference — unless the stock rises. Then they could lose money instead.