Problems at Hindenburg Research
I know Nate Anderson, I’ve had dinner with him, and I admire many of the investigations he’s done with his team at Hindenburg. I think Hindenburg is a talented firm that is positively impacting the world.
I also am concerned that Hindenburg has not properly acknowledged The Bear Cave in its work, most recently and most egregiously with Hindenburg’s report last week on Roblox.
The Bear Cave has published on Roblox extensively over the last two and a half years, largely focusing on safety and child abuse issues on the platform.
At times, Hindenburg used virtually identical reporting, wording, sourcing, and research methods in its Roblox report yet doesn’t mention The Bear Cave once in its 16,405-word report.
For the curious reader, Hindenburg’s full October 8, 2024 Roblox investigation is available here and The Bear Cave’s past investigations are below:
“Problems at Roblox (RBLX)” (February 3, 2022)
“More Problems at Roblox (RBLX)” (February 17, 2022)
“Even More Problems at Roblox (RBLX)” (August 17, 2023)
“Problems at Roblox (RBLX) #4” (October 3, 2024)
This is not the first time Hindenburg has published on companies first profiled by The Bear Cave.
For example, in June 2024 Hindenburg published on Axos Financial (AX), seven months after The Bear Cave’s November 2023 Axos investigation:
The first sentence of The Bear Cave’s November 2023 article reads:
Axos Financial (NYSE: AX — $2.27 billion) describes itself as “a technology-driven financial services company that provides innovative banking products and services to customers nationwide.”
The second sentence of Hindenburg’s June 2024 report reads:
The company describes itself as a “technology-driven financial services company that provides innovative banking products and services to customers nationwide”, per its website.
Hindenburg’s 9,505-word Axos report has some commonality with The Bear Cave, largely focuses on different sub-issues, and does not mention The Bear Cave once. The Bear Cave cited prior reporting by five Axos short sellers in our article, Hindenburg mentioned none.
In February 2024, Hindenburg published on LifeStance Health (LFST) four months after The Bear Cave’s October 2023 investigation:
Hindenburg touched on some of the same issues first mentioned by The Bear Cave but largely focused on therapist turnover while The Bear Cave focused on billing issues. Hindenburg did not mention The Bear Cave once in its 8,848-word report.
And in August 2023 Hindenburg also published on Freedom Holdings (FRHC) a little over a year after The Bear Cave published on the company. Hindenburg’s 17,735-word article doesn’t mention The Bear Cave once but does cite other media, including some originally cited by The Bear Cave.
Notably, while Hindenburg has on four occasions published on a company following an investigation by The Bear Cave, The Bear Cave has never published an investigation following a Hindenburg report. And if we did, The Bear Cave would do what we always do: acknowledge those who have done notable past work.
Of highest concern, Hindenburg’s Roblox report covered numerous issues that The Bear Cave previously wrote about extensively, with no attribution whatsoever.
For example, Hindenburg wrote that it “found Roblox groups openly trading child pornography,” a claim Hindenburg repeats seven times throughout its report. As evidence, Hindenburg shows screenshots from a Roblox chat showing users offering to trade child pornography:
However, one week and one year before Hindenburg’s report, The Bear Cave made the exact same point and showed screenshots of virtually identical content in Roblox chat rooms. Below are screenshots from The Bear Cave’s August 2023 and October 3, 2024 investigations:
In August 2023, The Bear Cave wrote:
“a Roblox user says ‘add me to trade on [ghost emoji] (only girls)’ with the ghost emoji representing Snapchat. Another user writes ‘add me to trade on [disc emoji] girls. (14 btw),’ a likely reference to Discord.”
In October 2024, Hindenburg wrote:
“one member… openly advertised selling nude pictures and videos for Robux, leaving emojis on their profile page to signify their Discord username for others to add them off-platform”
At other times Hindenburg rewrites the same information as The Bear Cave with very similar wording and paragraph structure. In our February 2022 investigation, The Bear Cave ended a paragraph referencing how Roblox abuse occurs not just online but also in the real world. The Bear Cave begins the next paragraph “For example, …” and highlights the case of Owain Thomas who groomed 150 children using Roblox’s in-game currency.
Hindenburg writes something virtually identical to The Bear Cave:
Hindenburg’s October 2024 report also links to the exact same article as The Bear Cave’s February 3, 2022 investigation, despite there being several other articles about the Owain Thomas abuses.
On a similar note, The Bear Cave’s February 17, 2022 investigation noted a media report by the BBC and highlighted Roblox’s disclosure that it “conducts a safety review of every uploaded image, audio, and video file.”
And Hindenburg highlights the same article and disclosure as The Bear Cave:
Hindenburg also published a numbered list of U.S. Roblox abuse cases ordered chronologically by year one week after The Bear Cave published a bulleted list of international and U.S. Roblox abuse cases ordered chronologically by month and year.
See below:
The Bear Cave had also highlighted many of these cases in our August 2023 and February 2022 investigations.
Other commonalities between Hindenburg and The Bear Cave’s prior reporting abound.
Both Hindenburg and The Bear Cave’s prior reporting give examples of games with anisemintic content. Both Hindenburg and The Bear Cave’s prior reporting give examples of rape content on Roblox. Both Hindenburg and The Bear Cave’s prior reporting give examples of inappropriate Roblox shooting games. Hindenburg shows a Roblox hospital shooting game. The Bear Cave exposed a Roblox school shooting game. In sum, both Hindenburg and The Bear Cave’s prior reporting show extensive documention of inappropriate content on Roblox and raise concerns about child safety.
Despite virtually identical reporting, wording, sourcing, and research methods, Hindenburg doesn’t mention The Bear Cave’s extensive investigations once in its 16,405-word Roblox report.
The Bear Cave’s Roblox investigations have hundreds of thousands of views and were market-moving. The Bear Cave is the dominant publication covering the activist short community with over 70,000 readers.
The Bear Cave has talked about Roblox child abuse so extensively for years that The Bear Cave often appears in the top search results for the Roblox child abuse cases Hindenburg cites.
Even after Hindenburg was made aware of some of these issues, they have not taken any corrective action or made any acknowledgement of The Bear Cave’s extensive publicly available work.
And because of The Bear Cave’s public and widely disseminated reporting on Roblox, many others in the investing community were first to call out the concerning similarities between Hindenburg and The Bear Cave’s prior reporting:
In reply to some of these concerns, others have added “seems like plagiarism to me I don’t know,” “I only started reading Hindenburg because of The Bear Cave,” and “I thought the same thing. It’s kind of repurposing your work.”
This is the essence of plaigarism: taking the heart of someone else’s work without acknowledgement and repurposing it for your own audience.
The only way independent media like The Bear Cave can be successful is if it demands proper credit from its larger peers. In this case, Hindenburg fell short.
This article is not investment advice and represents the opinions of its author, Edwin Dorsey. You can reach the author by email at edwin@585research.com or on Twitter @StockJabber.
From the evidence you provide, it appears that Hindenburg's behaviour was outrageous.
Sounds like you should drop your policy of not trading in your own recommendations. If your research is that good and copied months later by Hindenburg, you should start investing in your own ideas. It won't impede the credibility of your research with your audience, I am sure.