SahmAdrangi Plans to Make Unprecedented Short

In an unprecedented move that has quickly begun making waves within the industry, founder and Chief Investment Officer of Kerrisdale Capital Management, SahmAdrangi, has raised $100 million in an effort to short an unnamed stock that has yet to go public. Information regarding this move was recently detailed to Reuters by a person with intimate knowledge of the deal. This deal, which is being termed a “co-investment” fund, is said to be completely unique. Historically, hedge fund managers sometimes raise money in an effort to recover companies, such as distressed energy companies or mortgage-backed securities, but a move such as this has never been seen before.

In an email written to investors by Mr. Adrangi, he delivered a few details concerning the unprecedented deal. Mr. SahmAdrangi believes that Kerrisdale Capital Management’s ability to raise such a significant amount of capital over such a short period of time is evidence that his intention to short the unnamed stock is beginning to strike a cord in the alternatives community. The company that Mr. Adrangi intends to short, is said to be worth north of $10 billion. In an effort to garner further backing among supporters and investors, Mr. Adrangi, as well as Kerrisdale analyst, Shane Wilson, have been working on a report, as well as video and a website, that will give further credence to their thesis. The target company is said to be revealed in mid-May, as Kerrisdale Capital Management has already begun buying stock in the company in order to correctly position themselves for the impending move.

Initially created in 2009 on $1 million in startup capital, Mr. Adrangi has remained actively involved in the growth of the company. Mr. Adrangi first made a name for himself by shorting the stock of fraudulent Chinese companies, including Lihua International, China Marine Food Group, as well as China-Biotics. Kerrisdale Capital Management now manages approximately $500 million, including the new money garnered in the revealing of their planned short of the unnamed company. Over the last five years, Kerrisdale Capital Management has averaged a 28% return on investment but was down 7% as of March 2016.

 

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