Disclosure: Hindenburg Research does not hold positions, either long or short, in Tether, bitcoin or any cryptocurrency at the time of this press release.
I wonder why this Reaserch firm is offering such a substantial bounty for information on Tether. What's in it for them? Where will this money come from?
From their site they provide an answer (and even a "track record") [1]:
> We look for (...) man-made disasters floating around in the market and aim to shed light on them before they lure in more unsuspecting victims.
Hence it seems they're doing it for the bennefit of the public. So much for the expression "there's no such thing as a free lunch".
Presumably they would like to start a position by don't have sufficient information, and are attempting to buy that information.
Hidenburg is a short seller who takes positions in their research. See for instance their short of Nikola. While I'm sure they enjoy being helpful and that there's a reason they choose to engage in a very difficult way to earn a living, when there are easier opportunities available, their motives are hardly a mystery.
You can discount all their talk of helpfulness or assume they're just talking their book, and it doesn't really change anything.
Just because someone has something to gain, doesn't mean that their actions are corrupt.
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages”
-Adam Smith
When Hindenburg publishes equity research, the disclosure is "you should assume that as of the publication date of any short-biased report or letter, Hindenburg Research...has a short position in all stocks (and/or options of the stock) covered herein, and therefore stands to realize significant gains in the event that the price of any stock covered herein declines."
so they can trade on it before announcing it and then with the profit pay for the bounty, assuming they pay up or assuming tether falls. Tether has survived thus far everything thrown at it. The market is evidently very confident about tether.
They are fishing for edge. If they get information that they feel will be able to quickly move markets, they'll initiate a large position before dropping the release to the public. That's how they make money.
The expectation is that they will obtain large and valuable positions (either long or short) upon obtaining this information which is not (yet) known to the general public.
Perhaps they’re holding long put contracts on the Bitcoin ETF that just started trading. Their disclosure would still be true as they own contracts, not shares. An interesting coincidence with the timing.
$1 million is not that much, just for the sheer publicity Hindenburg gets. They're going to be quoted in WSJ, Economist, ... This brings new clients...
tcgv|4 years ago
From their site they provide an answer (and even a "track record") [1]:
> We look for (...) man-made disasters floating around in the market and aim to shed light on them before they lure in more unsuspecting victims.
Hence it seems they're doing it for the bennefit of the public. So much for the expression "there's no such thing as a free lunch".
[1] https://hindenburgresearch.com/about-us/
maxbond|4 years ago
Hidenburg is a short seller who takes positions in their research. See for instance their short of Nikola. While I'm sure they enjoy being helpful and that there's a reason they choose to engage in a very difficult way to earn a living, when there are easier opportunities available, their motives are hardly a mystery.
You can discount all their talk of helpfulness or assume they're just talking their book, and it doesn't really change anything.
epivosism|4 years ago
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages” -Adam Smith
https://www.goodreads.com/quotes/68664-it-is-not-from-the-be...
JumpCrisscross|4 years ago
When Hindenburg publishes equity research, the disclosure is "you should assume that as of the publication date of any short-biased report or letter, Hindenburg Research...has a short position in all stocks (and/or options of the stock) covered herein, and therefore stands to realize significant gains in the event that the price of any stock covered herein declines."
[1] https://hindenburgresearch.com/draftkings/
skybrian|4 years ago
If the news is actually true, this might even be considered a public service (as well as obviously a way to make money).
They probably wouldn’t do until they actually got a tip. Also, they might short crypto-related stocks if that’s easier.
paulpauper|4 years ago
b9a2cab5|4 years ago
sremani|4 years ago
If Tether tanks -- there are definitely decent proxies out there.
freeAgent|4 years ago
hansjorg|4 years ago
If Tether unravels and brings down the whole cryptocurrency bubble, there are probably more indirect positions that are safer bets?
dnautics|4 years ago
kfprt|4 years ago
PeterisP|4 years ago
IAmGraydon|4 years ago
ac29|4 years ago
perl4ever|4 years ago
freeAgent|4 years ago
LittlePeter|4 years ago