How Sahm Adrangi Makes Money Betting Against Companies

Sahm Adrangi has 14 years of experience in the financial industry. The last nine of those years have been spent running his own hedge company, Kerrisdale Capital Management LLC. He is based in New York City and he is primarily interested in small and mid-sized companies. Once he’s evaluated a company he’s interested he’ll take one of three actions. He’ll either take a short position on their stock, a long position, or he’ll not do anything and look for a better opportunity to make money.

Not long after he started his hedge fund Sahm Adrangi was researching some Chinese firms that traded on American stock markets. His research showed that something fishy was going on with a number of them. He decided to short them and the result was that in 2011 his hedge fund had a 180% return. To facilitate this, after he had taken a short position he put his research on his blog and some financial websites he knew that other professional investors frequented. When they saw that these companies were essentially frauds it tanked the value of these companies stocks, making Kerrisdale Capital Management have fantastic returns for the year.

One of these Chinese companies was China Biotics, for example. They said they sold nutritional supplements in over 100 outlets in China. Sahm Adrangi did his due diligence and researching all of the companies addresses for their locations revealed they only actually had four of them. As a result the company’s auditors quit because of “financial irregularities“. American shareholders ended up suing the company.

More recently, Sahm Adrangi has set his sights on a number of American firms like Globalstar in 2015. He shorted their stock after he saw that the satellite spectrum they owned was unusable. This was because it was right next to wi-fi and cellular bands that bled over and interfered with it. In 2016 he went after DISH Networks. He raised $100 million to bet against this company when he saw that they completely overvalued what their AWSS-4 cellular spectrum was worth and that there was no way they could sell it for what they wanted before their rights expired in 2020.

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