Tag Archives: special situation investments

How Sahm Adrangi Creates Wealth by Short Selling Stocks

If you’re familiar with Kerrisdale Capital, you have undoubtedly heard of Sahm Adrangi, he is the Founder and CEO of the investment management firm headquartered in New York. Over the years, the firm has gained a reputation for its emphasis on value and special situation investments. Adrangi attended the prestigious Yale University, where he earned a Bachelor of Arts degree in economics in 2003. After completing his studies, Adrangi began his career working in leveraged finance with German’s Deutsche Bank in 2004. In 2005, he decided to broaden his career horizon by joining Chanin Capital Partners, a boutique investment-banking firm. In 2007, Adrangi’s journey in the world of finance would lead to him being named Chief Analyst, for Longacre Fund Management; in this role, Adrangi was tasked with managing a $2 billion distressed debt fund.

In comparison to other investment management firms, Kerrisdale is small hedge fund manager, but it has been recognized as having the potential of becoming a key player in the industry. Kerrisdale Capital is best known for their unconventional approach when it comes to marketing; unlike many of its contemporaries, Kerrisdale Capital harnesses the power of social media to not only market the firm but also to call attention to Adrangi’s activist investing model. What is activist investing? Basically, it’s a form of investment that occurs when an individual or group purchases a large number of company shares and then tries to obtain seats on that company’s board.

Adrangi has found great success with activist investing; in fact, he has been lauded for his capacity to draw attention to fraudulent companies, while simultaneously “shorting their stocks.” What does this mean exactly? In layman’s terms, shorting a stock occurs when an individual or group sells a stock that they don’t own, with the expectation that the price of the security will ultimately fall. If this occurs, the individual or group can then repurchase that stock a lower price, thereby generating a profit.

Short selling is by no means, a revolutionary concept; in fact, it has been around for some time, but Adrangi has leveraged the investment strategy to generate enormous individual and company success. So, be sure to keep an eye out for even more achievements from the small hedge fund manager and its founder.

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