QuinStreet, Inc. is an internet marketing company based in Foster City, California which publicly trades its stock. It recently quadrupled its stock prices giving hope and anticipation to the investors of the organization. This, however, did not go for Kerrisdale Capital, an investment manager working on investments of a long-term nature and situations that are event-driven and headed by Sahm Adrangi, saw this as a sham, believing that the company’s business was being done in a shady manner, prompting an investigation led by Sahm Adrangi, the founder of Kerrisdale Capital Management. Kerrisdale wants to profit from the falling of QuinStreet’s shares should they go down, since it owns a short position at QuinStreet.
The report details that though QuinStreet profited from a partnership with Progressive, they have been engaging in using malware redirects misleading, web surfers to get revenue from them in the process. They use adware and paid surveys to attract people to click on those sites gaining them some revenue in the process. This proves that Sahm Adrangi was right, most of the traffic to the company was obtained from a site called Insurancebranch.com which pays users to click on the links they have advertised. QuinStreet started selling their shares, an indicator that a company is about to incur substantial losses.
The St. Joe Company has claimed to be worth an amount that Sahm Adrangi says is a lie, but instead, the company is worth a fraction of what they claim to be. St. Joe has been unable to develop a site near Panama Beach City which would be used by businesses and retirees. Sahm’s report says that there has been slow development regarding building or other developments by the company, proving that its $1 billion valuation is not able to do so. Its largest shareholder, Fairholme Fund, could fall victim to the SEC liquidity rules which demand that the company minimize their stakes, which could result in selling the company by force. Also, having a third of the shares in St. Joe, Fairholme Fund, the company is required to reduce its share by a half. Here also, Sahm’s Kerrisdale has a short position, and it’s bound to benefit should the company drop its share prices.