Investing is risky and short selling is even riskier but can be exceptionally profitable if the investor knows what they are doing. Chief Investment Officer of Kerrisdale Capital Management and outspoken activist investor Sahm Adrangi is certainly one of those who does. Sahm Adrangi made the world take notice back in 2011 after making a couple million shorting the stocks of US-listed Chinese companies that used reverse mergers to enter the market in the United States. It wasn’t the profits he made that brought him attention as he was one of a pool of investors focusing on the few hundred Chinese businesses using this method, it was his age. Visit Crunchbase to know more about Sahm Adrangi.
The 2003 Yale graduate was under 30 when he had this success, making him one of the youngest in the field to do so. While the value of the stock was certainly a focus, it was his personal values that led him to make the short sale attacks on these companies that he deemed as scams. The actions of himself and others caused many of these companies to be taken off the market while company executives and auditors resigned from fear of legal repercussions.
Sahm Adrangi has since turned his focus to mining, telecommunications, and biotech companies. Most recently notable, he has led two successful short sale attacks in recent months against pharmaceutical companies pushing drugs in development using misleading and faulty early stage test results. While nobody wants potentially life-saving medications to fail, he researched these drugs years before late-stage testing began and warned of their uselessness before patients had the chance to put much hope into them.
One of these medications, a prostate vaccine named Prostvac that was being developed by Bavarian Nordic, had already garnered a $60 million licensing deal through Bristol-Myers Squibb with another $80 million on the table if Phase III tests were a success. These results coupled with Sahm Adrangi’s attack sent Bavarian Nordic’s stock plummeting by half and do not look promising for their lung and bladder cancers in development that use similar mechanisms to Prostvac.
Before founding Kerrisdale Capital in 2009, Sahm Adrangi gained experience in investing through analyst positions at firms such as Longacre Fund Management LLC where he worked with a distressed debt fund worth around $2 billion. He has been featured in Wall Street Journal, Business Week and others and is invited to share his expertise at international investing conferences. Follow Sahm Adrangi on Twitter.