On May 3, 2018, Sahm Adrangi gave a presentation about ad fraud. This took place at a Kase Learning event which was all about short selling. He is with Kerrisdale Capital Management and his company has been operating for almost a decade. His company manages about $180 million. He said during his presentation that his company is built around being a short activist and that they first started to publish their research on shorts beginning in 2010. His company’s start as a short activist came when they shorted the stock of a number of fraudulent Chinese businesses which was a highly successful bet. Since that time the team at Kerrisdale Capital has focused on American companies.
Sahm Adrangi said that they share their research on the companies they are shorting in a variety of formats. The research is posted to their website and available there to anyone who subscribes. They also distribute their research through an email distribution list and post it on Twitter. His company will also have a team member go on a financial show on either Bloomberg or CNBC. They also post research on Seeking Alpha and will also do live presentations.
As for ad fraud, Sahm Adrangi said one of the reasons he likes to short the companies doing this is that it combines his company’s short activism along with doing social good. He said that Kerrisdale Capital will identify stocks with prices that are higher than where they ought to be trading at. He said that when his company shorted the Chinese companies it resorted in wiping out billions of dollars worth of fraudulent corporate values.
Sahm Adrangi said that there are a number of ad tech companies that are unfairly benefiting from ad fraud which is being openly committed on their platforms. He said that the online ad impression click conversions are faked and they also use data events in order to make sales. When a company like Coca-Cola spends $25,000 on an online ad campaign some ad tech companies send a lot of fake traffic to the ad and then present it as if it were real people clicking on it.