Spruce Point shorts ad-tech firm Perion Network (updated)

Perion Network

23/05/2023 14:29

(Adds share movement in paragraph 2, Spruce Point's report
details in paragraphs 3, 4, 6, 7)
       May 23 (Reuters) - 
    Spruce Point Capital Management said on Tuesday it was short
on ad technology firm Perion Network  PERI.O , as it had
concerns about the accuracy of the company's "financial
reporting, efficacy of its product suite, and the sustainability
of its growth."
    Shares of the company fell 4.9% in trading before the bell.
        "Perion has a history of business model pivots that
spark unsustainable improvements in performance and share
price," said the New York-based short-seller, which issued a
"strong sell" rating on Perion.
  
        "We believe this time is no different and will end
poorly for investors."
  
    Perion did not immediately respond to a request for comment.
    Spruce Point said it sees a 25% to 40% long-term downside
risk to Perion’s share price and it was concerned about the
company's "extreme dependency" on its partnership with
Microsoft.
        The investment firm said in its report that in 2021 and
2022, Perion reported that 37% and 35% of the company's revenue
came from Microsoft  MSFT.O .

 (Reporting by Chavi Mehta in Bengaluru; Editing by Maju Samuel)
 ((Chavi.Mehta@thomsonreuters.com;))