Zeta Global’s stock price jumped 15% yesterday as the company issued a detailed rebuttal to a report critical of its financial practices. Shares closed at $25.4 Wednesday after opening at $22.
Last week, short-seller Culper Research issued a report alleging the AI marketing cloud company “formed ‘two-way’ contracts with third-party consent farms wherein the Company simultaneously acts as both 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 a company sells an unused asset to another company while agreeing to buy back it or similar assets at about the same price.
In yesterday’s response, Zeta stressed that its financial statements are complete, accurate and reviewed by its external auditing firm. The company refuted claims of “consent farms” and clarified round-tripping concerns.
Culper Research is owned by Christian Lamarco, who is known for short-selling stocks and may profit 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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