Culper Research announced a short position in Zeta Global (ZETA), saying it believes the company has formed “two-way” contracts with third party consent farms wherein it simultaneously acts as both a supplier and a buyer of consumer data. In addition, Zeta has “quietly spun up its own network of consent farms i.e., sham websites that hoodwink millions of consumers each month into handing their data over to Zeta under false pretenses,” Culper wrote in a short report published on its website. It believes these consent farms have driven almost the entirety of Zeta’s growth over the past two years and now represent 56% of reported adjusted EBITDA. Culper believes Zeta “faces potentially devastating regulatory action.” The stock in afternoon trading is down 10% to $25.29.
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