Sahm Adrangi Recently spoke at the Kase Learning Conference on Short Selling, on the topic of ad fraud.
At the Kase Learning Conference Sahm Adrangi Chief investment Officer for Kerrisdale Capital Management Spoke about the companies 9 years in business and stated that they have been publishing reports on shorts since 2010 during a time when short sellers eradicated an estimated 10 to 20 billion dollars that were being invested in fraudulent Chinese companies. He went on to state that the company is now focused primarily on U.S. companies in certain complex sectors.
He then explained that the company shares its research a wide variety of ways, such as the company’s website, on Twitter search for the handle Keer. Sahm Adrangi stated that the company would also make appearances on CNBC and Bloomberg. The company will also post information on Seeking Alpha.
At that point, Sahm Adrangi got into the heart of his presentation. He explained that his company believes that there are tech companies that are benefiting from advertisement fraud on their platforms. He then explained their advertisement fraud is defined as falsely representing online advertisement impressions or clicks to generate revenue. He then provided several examples of how Eastern European hackers were able to generate revenue through advertising fraud.
One method he of fraud explained is the use of Bots and Bot Networks. Bots are programs designed to perform a task repetitively and a Bot Network is simply a group of Bots networked together. These Bots are used to fraudulently inflate the click rate on pay per click advertising. Another message of advertisement fraud is known as ad stuffing, This occurs when a person clicks to watch a video on a website and unbeknownst to the individual one or more advertising video will be playing behind the selected video and will not be viewed by the individual. The Advertiser will be charged as if the advertisements were viewed.
After explaining the various types of advertisement fraud being used Sahm Adrangi went on to explain how this information could be used by his company and other short sellers. He explained that eventually companies the amount of their advertising budget being spent on online ads this will cause a reduction in revenue for online media companies. Armed with this information short sellers should be able to profit.