Kerrisdale Capital has taken a look at how certain advertising firms have made revenue over the years, and one that they’ve been highly skeptical of is QuinStreet. QuinStreet usually has made its revenue off of making different sales referrals to various insurance companies, or other professional services companies. But Kerrisdale CIO Sahm Adrangi has noted that the company has come under scrutiny for engaging in some questionable marketing leads for school ads targeted at military veterans, and now he says there may be traffic manipulation going on with some of its ads. While this practice in using certain platforms such as Swagbucks clickers to get ad clicks isn’t illegal, Adrangi does believe it affects the company’s bottom line. He put out a detailed report about it and has taken a short position on the company.
Sahm Adrangi has made most of his company’s revenue in shorting stocks of companies that he’s found to have unsustainable or questionable business practices. But in doing so, he’s had all research done on those companies from their management, financial strategies and where their bottom line comes from. The idea behind what Sahm Adrangi does is to bring more transparency to deceptive practices in different industries, and to give investors information that many mainstream media outlets have not. Along with shorting stocks in overvalued companies, Adrangi has also found companies undervalued that have later grown.
Sahm Adrangi has a distinguished resume in finance with a bachelor’s degree in economics from Yale. He began as an analyst in the credit division of Deutsche Bank and also part-time at Chanin Capital Partners. Adrangi also managed billions in assets at Longacre Management, a major hedge fund at the time. He founded Kerrisdale Capital in 2009 with less than $1 million, but today he manages over $170 million in the firm’s portfolio. Among the stocks he has shorted include several Chinese companies that were convicted of fraud by the SEC, and some insights into the ways that telecom companies like DISH Network and ViaSat that became of interest to shareholders. Adrangi has been interviewed several times on networks like Bloomberg and CNBC.