Hindenburg and the relevance of company names

Apple, Lupin and Hindenburg Research have all lived up to their names. (Illustration by Suneesh K.)

The long-forgotten tragedy of the Hindenburg airship which went down on May 6, 1937, in New Jersey, US, resurfaced suddenly last fortnight, thousands of miles away in India when a little-known short seller by that name put out a damning report which sent the stocks of listed Adani group companies careening. The research firm website says it is so named after what it considers one of the world’s worst man-made and avoidable accidents.

Also read: Hindenburg vs Adani: The short seller taking on the Indian businessman

The firms it goes after, first short selling their stocks, and then releasing the rationale for it in the public domain, are also those that by implication shoot themselves in the foot. Some of the firms the firm has written about, do fit that bill.

In September 2020 Hindenburg released a report titled “Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America” which called out a vast array of alleged lies and deceptions by the company. The revelations led to the resignation of Nikola founder and executive chairman Trevor Milton even as its market cap crashed from over $30 billion to under $2 billion.

That cemented Hindenburg Research’s association with companies facing its wrath. Next time the name appears, most readers will be alerted to a coming corporate expose.

All companies look for some such resonance through their names. When we think of Apple Computers, we think of something new and exciting since that’s what we’ve come to expect from the company. In reality, Steve Jobs was on one of his fruitarian diets and after a visit to an apple farm, thought it would be a good idea to give that name to the fledgling startup that he and Steve Wozniak were planning. Walter Isaacson’s biography of Jobs says that he thought the name sounded “fun, spirited and not intimidating.” Most users of Apple products will agree the company has lived up to that.

Indeed, recent Western management thinking imbues huge importance to a company’s name believing it plays a massive role in a brand's growth and perception. Experts say, a name can potentially make or break a new company. Which is why startups today choose their company names with great care. Flipkart, Paytm, Nykaa are all examples of clever names that have stuck, though it’s a moot point whether Zomato is a better name than its earlier avatar Foodiebay.

In the past, though, Indian companies owners didn’t spend too much time thinking through the brand equity of the names they gave their firms. In 1958, when Dhirubhai Ambani returned from Aden, he started a company to trade yarn and spices in partnership with a cousin and named it Reliance Commercial Corporation. His dreams were big but at that moment working out of his tiny 500 sq. ft. office in Masjid Bunder, Mumbai, the name wasn’t the most important thing on his mind.

Ranbaxy, once the Indian pharma industries’ high-flier, was a blend of the names of its two founders Ranbir and Gurbax from whom Bhai Mohan Singh bought the company in 1952. Another Indian pharma company, Lupin, is named after a plant found mainly in the Americas known for its flowers and edible legume seeds and considered a lifesaver in times of famine. Yet, even though the name is quite appropriate, since Lupin has over the decades saved the lives of thousands of tuberculosis patients, the company’s legendary founder Desh Bandhu Gupta had little role to play in its choice since he bought the firm when he started his business.

Even in the US, where naming companies is a full-blown industry, many of those we are familiar with came upon their names quite serendipitously. Thus, Google is derived from a misspelling of its co-founder Larry Page's original planned name, googol (a mathematical term for the number one followed by 100 zeroes). In India, the name Dabur is derived from the Devanagari rendition of Daktar, which is what villagers in Bengal called the visionary founder of the company, Dr S.K. Burman.

Despite the efforts spent on stressing the importance of names, it is evident that many of the names that have stuck did so because of the company and its products or services. Of course, a particularly offensive name can be a liability which is probably why US firm Analtech renamed itself Miles Scientific!