Sahm Adrangi of Kerrisdale Capital Management recently had the honor of being the first speaker at a conference held to talk about short selling named, “The Art, Pain, and Opportunity of Short Selling”. This conference featured over a dozen speakers who talked about the challenges facing those who are short sellers, betting that a company’s stock is overvalued and due for a correction to where its price should be.
He named his speech Ad Fraud Opportunities“. Sahm Adrangi along with his colleagues believe that ad fraud is on the increase. When a news report comes out talking about the latest fraud in regards to online ad numbers he needs to be able to quickly predict what will happen to the stock value of the company that is involved. By making correct bets he increased Kerrisdale Capital Management from a firm with $1 million in assets 10 years ago to a company that now manages $150 million.
Sahm Adrangi is notable for researching companies, spotting that they are overvalued, shorting their stock, and then publishing his research. One company he recently called out as overvalued is The St. Joe Company. He pointed out a number of this company’s shortcomings whic h led to a big decline in this company’s stock value. Among the shortcomings, he pointed out was that they have some pretty desolate land near Panama City Beach which they bought over a decade ago and so far have little to show for it.
Sahm Adrangi released his research showing that The St. Joe Company stock value was very absurd. The market values this company at close to $1 billion. In order to be worth that amount of money, Sahm Adrangi stated that they would have to sell more land than every other company in the Florida Pan Handle put together. It would require that this land would have to become the top-selling master planned community in the United States which is virtually impossible because it is swampland in a remote area that just about nobody wants to live on. He said that this plan has no way of panning out and so he shorted their stock.