Jonathan Ratner, 01 September 2016
Canadian miner First Majestic Silver Corp. has become the target of well-known short seller Kerrisdale Capital Management. The hedge fund, founded by its chief investment officer, Vancouver-raised Sahm Adrangi, called the stock “absurdly overvalued” in a new report released on Thursday.
First Majestic, a Mexico-focused silver miner, has seen its shares climb nearly 250 per cent in 2016, as sentiment toward the mining sector rebounds along with precious metals prices. Kerrisdale, whose short-selling campaigns include ChinaCast Education Corp. in 2011 and DISH Network Co. in May 2016, believes First Majestic is “ludicrously expensive” relative to both its peers and its own history.
“This speculative frenzy – exacerbated by an ongoing, company-funded stock-promotion campaign – has gone too far: First Majestic’s valuation is now outrageously detached from reality,” the firm said in the report.