Sahm Adrangi, the fund manager of Kerrisdale Capital, has made a name for himself in the crypto industry by short-selling Riot Platforms (NASDAQ:RIOT). Adrangi’s tweet caused RIOT’s share price to drop 10% within an hour of NASDAQ’s open, from $9.85 to $8.84. Despite his success in this trade, Adrangi has faced criticism for his aggressive media appearances and past controversies, including a DUI arrest in the Hamptons.
Adrangi’s initial capital came from his family, with a New York Magazine profile revealing that he started with $300,000 of their money in 2009. He has described his short-sale of Riot as a “war against bitcoin miners,” accusing them of wasting investor capital and harming the environment. Critics have labeled Adrangi a Karen and mocked Kerrisdale Capital’s underperformance, pointing out losing trades like the short-sale of Uranium Energy Corporation.
In his report on Riot Platforms, Adrangi claims that the company “incinerates cash” and has diluted its shares six-fold, leading to a 43% decline in price despite a 60% rally in bitcoin. He predicts that Riot will continue to dilute shareholders indefinitely. Bitcoin miners have responded to the allegations in the report, debunking safety concerns and criticizing Adrangi’s complaints about government subsidies received by Riot.
After initially trading down in response to the report, Riot’s share price steadily recovered. As of pre-market trading on Friday, the stock was back to $9.49, barely changed from the initial report. Despite Adrangi’s success in the short-sale, some believe that Kerrisdale Capital will ultimately lose money on the trade. This situation highlights the volatile nature of the stock market and the challenges faced by both investors and traders in making profitable decisions.
Discussion about this post