Hedge fund investor Sahm Adrangi uses his capital to destroy bad business and he’s profiting from it while making a difference. The activist investor and Chief Investment Officer of Kerrisdale Capital Management LLC. first made headlines by taking down several shady Chinese companies that were listed in the United States by instigating short-selling attacks on their stocks. This resulted in a couple million in profits, several investigations, and multiple companies being exposed for fraud and facing enforcement actions internationally. More details on Sahm Adrangi at valuewalk.com.
Some of these companies were for-profit education centers that were essentially complete hoaxes. Of these companies the China Education Alliance and the ChinaCast Education Corporation both faced legal actions because of their fraudulent activities. Other companies he targeted in 2011 were Lihua International and the China Marine Food Group. While a couple million profit may not be comparative to some of the larger, more seasoned investment companies, Sahm Adrangi wasn’t even 30 when he made these discoveries and bet against them. Consequently, his age and methods of betting against companies brought him international attention. Learn more about Sahm Adrangi at Businessinsider.com.
In 2017, two of his bets against pharmaceutical companies that were developing drugs that he had predicted would fail paid off within weeks of each other. These included a failed prostate cancer vaccine and a drug to treat a rare type of epilepsy that both showed to be only as effective as placebo in late trials. In light of his recent correct predictions, investors took notice when he announced his negative opinion on Prothena’s AL amyloidosis drug. Sahm Adrangi’s prediction in that the positive results shown in the trials are simply the result of natural variance as opposed to the drug itself. Consequently, the company’s stock fell approximately 8% when Sahm Adrangi made his research public. If his prognosis is correct, Prothena will join several other biotech companies such as Bavarian Nordic, Zafgen, Sage, Biosciences, and Unilife who used bad science to sell bad drugs.
Adrangi founded Kerrisdale in 2009 and previously worked for Deutsche Bank, Chanin Capital Partners, and Longacre Fund Management LLC. as an analyst after graduating from Yale University in 2003.