Zeta Global Refutes Short-Seller Claims and Announces Forensic Review Findings

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Zeta Global responds to a short-seller report with strong denials, announces a previously conducted forensic review supporting its financial practices, and schedules a webinar to discuss its accounting processes and data policies.

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Zeta Global Responds to Short-Seller Allegations

Zeta Global (NYSE: ZETA), an AI-powered marketing cloud company, has issued a strong rebuttal to claims made in a report by Culper Research, a short-seller, published on November 13, 2024. The company categorically denies the allegations, describing the report as "riddled with misrepresentations, speculative conjecture, and categorically false statements" 1.

Key Points of Zeta's Response

  1. Accounting Practices: Zeta affirms confidence in its internal accounting processes and controls. The company clarifies that Deloitte, not E&Y as erroneously stated in the report, is its independent auditor 2.

  2. Revenue Recognition: The company asserts its compliance with Generally Accepted Accounting Principles (GAAP) in contract evaluation and revenue recognition. Zeta's management regularly briefs the Audit Committee on relationships with customers who are also vendors 1.

  3. Data Collection Practices: Zeta strongly denies operating "consent farms" and emphasizes its significant investments in data protection, governance, and privacy oversight 2.

  4. Business Contributions: Contrary to the report's claims, Zeta states that the contributions of Apptness and ArcaMax to its business are not material, with their combined year-to-date revenue contribution being less than 3% 1.

Forensic Review Findings

In a subsequent announcement, Zeta Global revealed the results of a previously conducted forensic review, which found the company's practices sound and financial statements accurate 5. This review, overseen by the Audit Committee of Zeta's Board of Directors, was conducted in 2022 and 2023 by Latham & Watkins LLP and external forensic accountants.

Upcoming Webinar

To address these issues comprehensively, Zeta Global has scheduled a webinar for November 20, 2024, at 3:30 p.m. Eastern Time 3. The webinar, hosted by William Blair, will feature key Zeta executives discussing the company's accounting processes, controls, data collection policies, and privacy oversight 4.

Company Background

Zeta Global, founded in 2007 by David A. Steinberg and John Sculley, is an AI-Powered Marketing Cloud that uses advanced artificial intelligence and consumer signals to assist marketers in customer acquisition, growth, and retention. The company's Zeta Marketing Platform (ZMP) aims to simplify sophisticated marketing by unifying identity, intelligence, and omnichannel activation 5.

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