In the world of businesses gain success and fail every single day. While most investors are devastated when their investment sinks, Sahm Adrangi sees dollar signs. This is because Sahm Adrangi does not typically invest in reliable companies, he invests in bad ones that are doing good temporarily due to dishonesty and just all around unenviable business practices. He does this through the complicated and risky process of short-selling. Short-selling stocks may come with a lot of risks and is generally not a short-term investment, but the payoff can be sizeable if the shares happen to go down in price. It works by borrowing stocks from a lender, selling them back right away, buying them back when the price goes down, and then returning them to the original lender. This is the process if everything goes according to plan, but if by chance the stock goes up, the buyer is forced to rebuy the stocks at a higher price and they lose money.
Sahm Adrangi has had a lot of experience in short-selling and has predicted the fall of several large companies with shady business practices. In the last few months, Kerrisdale Capital’s Sahm Adrangi took interest in the marketing company QuinStreet. QuinStreet’s marketing is done via online affiliates and they get revenue from their clients for all traffic directed to their site from them. After QuinStreet’s share price quadrupled, he decided to look into why and initiated research performed by Kerrisdale and their team of experts. The experts at Kerrisdale found that the increased revenue that prompted the rise in their stock price came mostly from just one of their customers. The rapid increase in traffic with no reasonable explanation or improvement in their marketing strategies leaves Sahm Adrangi suspicious that the majority of the traffic is generated by bots on the internet rather than real people. These bots are programmed to automatically click on links and fill out forms so companies can collect money for traffic that they did not actually generate.