According to a report (March 2018) by Kerrisdale Capital, a private investment manager owned by Sahm Adrangi, QuinStreet, Inc. a web 1.0 firm used unsavory methods to grow its capital base.
Followup to my last tweet —
— Sahm Adrangi (@SahmAdrangi) May 16, 2018
Kerrisdale Capital, founded in 2009 by Sahm Adrangi, its chief investment officer, went ahead to outline its findings in a report that scrutinized the quality and sustainability of QuinStreet as a middleman between online advertisers and niche websites.
Primarily, the legitimacy of the report is backed by Sahm Adrangi’s substantial background in matters concerning investment analysis. With a Bachelors of Arts in Economics from Yale University in his repertoire, Sahm Adrangi has in the recent past served as investment analyst at Longacre Fund Management, LLC where he instructed creditors about in out-of-court and Chapter 11 bankruptcy restructurings and assignments. As a result, his organization’s opinion on the goings-on at QuinStreet possesses that much more weight.
Furthermore, Kerrisdale Capital laid down a sizable amount of arguments meant to make its position on the matter clearer. Kerrisdale capital in its report went on to state that QuinStreet’s recent burst in revenue growth could be traced exclusively to a single customer, secondly the report maintains that QuinStreet and her customers benefit from suspicious web traffic such as malware redirects and false leads from internet users looking to make a killing out of the process rather than genuine customers looking to purchase. In addition Kerrisdale also believes that the main online hub affiliated to QuinStreet, Insurance branch, is a fake site because it cannot be found in web searches.
Further arguments by Kerrisdale Capital against QuinStreet’s business model outlined in the report paints a picture of a business on the downside, the report claims the organization shows no signs of a turnaround, and that Kerrisdale top management including the Chief Executive Officer and the Chief Finance Officer have recently began selling their shares.
In summary, the report concluded that QuinStreet was a company whose business model hadn’t changed to accommodate the growth that has characterized modern online advertising. As such, QuinStreet, Inc. was sure to fail.