In an unprecedented move, founder and Chief Investment Officer of Kerrisdale Capital Management, SahmAdrangi, has raised $100 million in order to bet against a single stock; o ne in which he has yet to disclose. A person with intimate knowledge of the inner workings of the deal recently released this information to Reuters. This move by Mr. SahmAdrangi, which has been coined a “co-investment,” appears to be the very first of its kind. History has shown that companies will sometimes raise finances in order to use in an investment thesis in order to recover distressed companies, but Kerrisdale Capital Management intends to short the stock of a company that will soon be revealed after it goes public.
In an email distributed to investors, Mr. Adrangi detailed some of the initial terms of the maneuver, including the fact that his company has raised a significant amount of capital in a relatively short time span, believing that this has proven that they are making waves within the alternatives community. The company that Kerrisdale Capital Management intends to short, has been described by Mr. Adrangi as one whose worth is north of $10 billion, further emphasizing the magnitude of the potential move. In an effort to convince others of the potential that shorting this stock will have on the market, as well as to garner more investors, Mr. Adrangi, along with Shane Wilson, an analyst at Kerrisdale Capital Management, have been working on a report and a website that will go into further detail about their thesis.
Mr. Adrangi is the founder and Chief Executive Officer of Kerrisdale Capital Management and has been developing the company continuously since its inception in 2009. As of July 2017, Kerrisdale Capital Management is managing $150 million, after beginning on startup funds of under $1 million. In the world of fund management, Mr. Adrangi is well known for his exploits involving short selling, as well as publishing research. He first rose to prominence in 2011 after shorting fraudulent Chinese companies, such as Lihua International, China-Biotics, and China Marine Food Group. Mr. Adrangi has also published a myriad of reports regarding telecommunications.