Sahm Adrangi has made a lot of predictions in the past based on the research carried out by his company Kerrisdale Capital Management. These predictions are based on Sahm Adrangi’s suspicions of dishonest business practices that have led investors into putting capital into stocks that are extremely overvalued or essentially worthless. In recent months, Sahm Adrangi has released negative reports on the pharmaceutical company Proteostasis and the Eastman Kodak Company. Proteostasis currently has a medication that is going through its third stage of trials that have used faulty data to make the drug look like it has more effect on the illness it was designed to treat than it actually does. In the case of Kodak Eastman, Sahm Adrangi sees their new KodakCoin and KodakOne as doomed to fail before they even get off of the ground because of legal and technical issues that he thinks they will inevitably be faced.
His newest report is based on the recent rise in stock price of the QuinStreet online marketing business. Despite the excitement of investors, he thinks the reasons they are putting their trust behind QuinStreet are absolutely bogus and were designed to try to bail the company out of inevitable failure. QuinStreet has been struggling financially for years so when they suddenly received an unusual influx of revenue driven by traffic to only one of their clients, it made Sahm Adrangi take notice. Upon further investigation, Kerrisdale Capital Management determined that the increase in traffic that QuinStreet has been experiencing is most likely all computer generated instead of genuine. QuinStreet operates by driving traffic to the sites of their affiliates when their affiliate is given traffic an business through QuinStreet they pay the company for their services. No traffic, no payment. This means that is QuinStreet is indeed generating fake traffic, they are costing their clients money that they should not have to pay.
Kerrisdale Capital Management and Sahm Adrangi have taken a short position on QuinStreet and investors should be very careful if they invest in the future of the online marketing company.
Followup to my last tweet —
— Sahm Adrangi (@SahmAdrangi) May 16, 2018