Zeta Global announced it should hold a video call on Wednesday to address accusations that caused its stock price to drop 34% within the last week.
A report last week from Culper Research claims the AI marketing cloud company “formed ‘two-way’ contracts with third-party consent farms wherein the Company concurrently acts as each a supplier and a buyer of consumer data, not only allowing the Company to flatter reported revenue growth, but raising round tripping concerns.”
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Round tripping is when an organization sells an unused asset to one other company while agreeing to buy back it or similar assets at in regards to the same price.
Since last Wednesday, when the paper was released, Zeta’s share price has fallen from $28.4 to $18.6.
Zeta said in an announcement that the report is crammed with falsehoods, speculations and misinformation.
“[It] is misleading and conveys, at most, a superficial understanding of Zeta’s business and practices. It relies heavily on questionable sources that get basic facts fallacious, cites financial metrics which are off by lots of of thousands and thousands of dollars, and doesn’t even accurately discover the Company’s Big Four auditor.” Culper said Zeta’s auditor is E&Y, but the corporate’s auditor is Deloitte.
Culper also accused Zeta of running a “network of consent farms i.e., sham web sites that hoodwink thousands and thousands of consumers every month into handing their data over to Zeta under false pretenses, baited by job applications, stimulus money, or other rewards that simply don’t exist.”
The research firm is owned by Christian Lamarco, who is understood for short-selling stocks and will benefit from a drop in Zeta’s stock price. A disclaimer for the report on Zeta states, “You should assume that Culper…has a position in any securities covered herein.“
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