GNC Affairs through Sahm Adrangi’s Lens

Soon after the publication of the piece: An Ode To Those Who Wander, Sahm Adrangi, a former hedge fund credit analyst reached out to me with the intention of discussing GNC Holdings Inc. During the weekend, we finally found the time. The former Wall Street bond trader had been following my work with which he built a significant position. Sahm Adrangi agreed with thesis adding that he frequented the stores, made channel checks as he and his wife moved to the Raleigh area. According to him, he had noticed decent traffic trends around his region. He also said that there was a break between his experience in the stores and the Bears’ thesis. Adrangi noted that the Robert Moran playbook was working as there was an inherent lag between today and when the shift showed up in the numbers. The sad part is that Wall Street could not predict the change. As a result, it still holds on to the ratios adopted by the old GNC.

Sahm Adrangi also pointed out that since his time in Wall Street, the reason GNC’s debt traded poorly is due to the adoption of a significant market capitalization as a cushion and using equity as the barometer. The equity is used to give an all-clear signal. Additionally, he ascertained my thesis on the current asymmetrical risk/reward for GNC. During this conversation, he shed light on the fact that bodybuilding.com had laid off 15 percent of its staff members. The hedge fund supernovas indicated that GNC bodybuilding.com was a threat yet the company was scaling down on its staff, a fact that weakened the Bears’ argument.

Sahm Adrangi is associated with Kerrisdale Capital Management. He is the chief investment officer. Since its foundation in 2009, he has actively participated in its development. The company began with a portfolio of below $1 million. However, as of today, the firm manages over $ 150 million. Kerrisdale conducts research meant to correct misconceptions about the fundamental business prospects. The analysis is posted on Twitter, third-party websites, and on its site.

Sahm Adrangi career began at Deutsche Bank and Chanin Capital Partners where he advised creditor committees on matters bankruptcy. Additionally, he spent part of his career at Longacre Management. He is a public speaker and holds a degree in Economics from Yale University.

Learn More: www.linkedin.com/in/sahm-adrangi-3548541