Kerrisdale Capital Management LLC is a company known to many for their work on shorts activism. Sahm Adrangi, the chief investment officer and founder of the company, has made a name in investment banking since the company’s foundation in 2009. Sahm focuses on exposing fraudulent companies by doing extensive research on where their capital comes from.
Sahm Adrangi’s company first made the headlines in 2010 after they exposed and published their research on Chinese frauds. The companies that Sahm featured in the research became recipients of SEC regulation actions. Sahm has also campaigned against St. Joe land developer on Globalstar as part of his short activism.
In the digital era, everything is not black and white as it would seem. Companies are making fortunes through ad fraud. Sahm Adrangi addressed this issues at the Kase Short Selling Conference amidst other short activists. Sahm raised the alarm on the many companies that have taken refuge in this act to generate revenue through fraudulent online advertisement.
Sahm Adrangi gave an example of ad fraud situation. For most companies, going through the legit channel can be frustrating especially if a publisher has no real users visiting the sites. So to make quick money, Sahm gave an instance where ads are displayed on fake websites. The counterfeit websites have a lot of traffic, not from humans, but from computers. These computers, bots, and botnets designed by eastern European hackers get to view the ads, and the companies get their revenue.
Another form of ad fraud that Sahm Adrangi exposes is add tagging and stuffing. In this case, the perfect example that he gave was video ads where other videos are playing in the background, but internet users cannot see. The videos get charges, but no one is seeing them.
Sahm Adrangi points out that legitimate publishers will drive revenue if online advertisers spend on online ads as they should do instead of participating in ad fraud.
Sahm avails the company’s research on their website or through e-mail subscription. He also spreads his knowledge on Twitter and other channels such as Bloomberg or CNBC. Sahm and Kerrisdale Capital are what the investment world needs to keep short activism active and help solve fraudulent practice.