Sahm Adrangi Adds a Negative Report on QuinStreet.
Sahm Adrangi, the founder of Kerrisdale Capital Management, after careful analysis, has issued a negative report for the marketing company QuinStreet. The company, headquartered in Foster City California, has been a presence in web marketing since its beginning in 1999 and QuinStreet uses sophisticated search engine marketing campaigns and performance-based postings to advertise for its clients. Citing irregularities within its web traffic and a small client base, Sahm Adrangi doesn’t feel that QuinStreet will continue to sustain its current level of growth and believes the company has lost its value as a long-term investment.
During his research into QuinStreet, he noticed a trend of sham traffic being driven through their affiliated networks which can generate false site visits and can allow QuinStreet to profit unfairly from its clients. Sahm Adrangi also cites the company’s inferior business model as an indicator of slowing future profits, and, most concerning, is QuinStreet’s narrow revenue base, with only one client generating the majority of the corporation’s income. While internet marketing is a growing trend and QuinStreet has been long-established in the internet advertising marketplace, Sahm Adrangi doesn’t expect that QuinStreet will continue to match its past performance, he is concerned with the seeming disregard QuinStreet appears to have about their clients advertising dollars, and doesn’t believe the company has a broad enough revenue base. With those key factors in mind, Sahm Adrangi and Kerrisdale Capital Management sold short.
Using fundamental values coupled with solid research techniques is how Sahm Adrangi and Kerrisdale Capital Management study different investments and their strengths. These principles have allowed Kerrisdale Capital to assets of more than $300 million. A highly experienced Yale graduate, he worked with Longacre Fund Management, Chanin Capital Partners, and Deutsche Bank before establishing Kerrisdale Capital Management. In addition to the management of the fund, he also shares his investment advice, including his Negative Reports, online, through Kerrisdale Capital Management’s website.