Posts Tagged ‘KodakOne’

Sahm Adrangi Targets Ad Fraud

Monday, July 30th, 2018

Sahm Adrangi made a name for himself as a short selling activist by exposing Chinese companies suspected of fraudulent practices, contributing to a decrease of the market value of those firms by $10 to $20 billion. The success of these short selling campaigns increased the capital under management of Kerrisdale Capital, founded by Adrangi, from $1 million to approximately $180 million. Adrangi has continued to operate primarily as a short selling activist, periodically releasing reports detailing his reasoning as to why a specific company may be overvalued, or how a particular industry may be operating under false pretenses.

At the Kase Learning conference on short selling, Sahm Adrangi discussed new potential targets for such practices: ad exchange intermediaries. As Adrangi explained during his presentation, ad exchange intermediaries occupy the role of matchmaker, satisfying companies’ desires to advertise with websites meeting certain thresholds regarding number of views and clicks. The companies purchasing ad space operate under the assumption that real live humans are behind those clicks and views, but Sahm Adrangi posits that these statistics are subject to inaccuracies, as the interactions on these websites may actually be performed by bots and other computers. Instances in which a bot or other computer is generating view and click figures used to sell ad space are viewed as ad fraud, since the company purchasing the ad isn’t receiving the service it purchased.

 

From Sahm Adrangi’s perspective, ad exchange intermediaries selling ad space at prices based on unreliable readership and engagement data leave themselves exposed to potential adverse stock price reactions as a result of selling misleading ad services. Further investigation into the practices of ad exchange companies may reveal that revenue has been collected on false data, creating a situation in which shareholder value may decrease dramatically. Adrangi’s ability to draw attention to companies operating under deceptive practices has deeply affected industries before, and he seems poised to continue building his legacy as a successful short selling activist.

 

http://www.futuresmag.com/author/sahm-adrangi%E2%80%8B