When David Zalik founded GreenSky back in 2006, he quickly realized that his vision for creating big-ticket point-of-sale loans was far more radical than anything that most commercial bankers had ever heard of. Unfortunately, the radical nature of his proposed business model didn’t appeal to the bankers that he went to in search of startup loans to launch his company. As a result, Zalik was forced to finance the entire operation himself. He took out loans using his entire real estate empire, properties worth an estimated $12 million.
Building a new model from the ground up
Zalik took a huge risk to start his firm, which would eventually become known as GreenSky . The model he was proposing had never been tried before. Zalik was essentially trying to build a mechanism by which average consumers could have access to the same kind of bridge financing upon which large real estate developers and other commercial enterprises routinely rely. The brilliance of Zalik’s insight lay in the fact that those commercial businesses would be foregoing tens or hundreds of billions of dollars per year in projects if they didn’t have access to such findings. What Zalik saw was that the same thing was true in the retail sector. Yet, there were no such mechanisms for consumers to push their own home remodeling projects through. This meant that the home improvement industry was losing billions of dollars per year in projects that could have materialized if it weren’t for a lack of immediate liquidity.
The other key factor behind the enormous success of the GreenSky business model is that everyone involved in the company’s deals wins. The homeowners who are seeking to remodel but don’t have the liquid capital available aren’t typically just doing these projects on a pure whim. The remodeling projects themselves usually add far more to the value of the home than their cost, giving the homeowners an instant and large return on capital.
At the same time, the contractors who promote GreenSky loans get business that would have otherwise not been there. And the banks making the loans get prime loans on their books, improving their financial position.
It has been known as a fundamentally-oriented investment organization manager which has its aim at investments that have long-term value. It is none other than Kerrisdale Capital Management, LLC which is an active member of Financial Industry Regulatory Authority. It is headed and managed by Sahm Adrangi. He also happens to be the Founder and Chief Investment Officer of the same investment manager.
Mr. Sahm Adrangi founded Kerrisdale in 2009 and has taken the firm from one development to another and has been involved in various aspects of the firm. The private investment manager has been involved in publishing several negative reports expressing its short positions in certain market situations. Recently, it explained its thought on NASDAQ: the QNST stock of an internet marketing company called QuinStreet Inc. which has risen four times than it was. This has blinded the eyes of the investors who now think that the company is on the right track. Nevertheless, according to Sahm Adrangi of Kerrisdale, the sustainability of QuinStreet is from some fake web traffic. As the client clicks and fills their form, QuinStreet’s revenue increases at the expense of an innocent client.
Kerrisdale also expressed their short position in the stock NYSE:KODK which belongs to Eastman Kodak Company which is basically involved in imaging and printing. After an announcement that the company will have a platform in the blockchain technology, their stock has risen with 187%. Nevertheless, Sahm Adrangi argues that this is just an ICO craze chase which is meant to cover up the poor fundamentals and capital structures of Kodak Company but it will fail terribly.
Sahm Adrangi has also some negative report on the stock NASDAQ: PTI which belongs to Proteostasis Therapeutics, Inc. The company is a biopharmaceutical that is involved in development stages of drugs that treat cystic fibrosis and currently testing PTI-428 drug. After being granted Breakthrough Therapy and Orphan Drug of PTI-428 by FDA, its stock rose by almost 100%. However, Kerrisdale argues that the drug is ineffective and Proteostasis Therapeutics is not disclosing all the information to the public about the PTI-428 drug.
Mr. Sahm Adrangi has dealt with financial matters in his prior jobs like in Deutsche Bank, Longacre Fund Management, and Chanin Capital Partners. He studied at Yale University for BA.