#1453 David Steinberg | How Short Sellers Attack Public Companies

— David Steinberg, founder and CEO of Zeta Global, discusses a major short-seller attack on his company and how it has responded with execution, stock buybacks, and transparency.

— Zeta Global is an AI-powered marketing platform that helps Fortune 500 companies reduce customer acquisition costs by approximately 50% using data targeting and intent scoring.

— The company achieved 42% organic growth and 92% free cash flow growth in Q3 2024, hitting record performance just before the short report was published.

— Short sellers accused Zeta of running unethical data signup farms and financial fraud; the company filed an 8-K with the SEC refuting each claim point-by-point and conducted a three-hour investor summit demonstrating compliance and data practices.

— Steinberg lost over $1 billion in personal wealth during the stock decline from $37 to $17, but announced a $100 million share buyback and personally invested millions alongside management to signal confidence in the business.

— The company has not lost a single customer since the short report, won a Fortune 100 RFP, and received 20 increases and 50 upsells from existing clients in the three weeks following the attack.

— Stock trading at $37 before earnings, traded to $44 in after-hours, then fell to $17 following short report publication within 48 hours.

— Zeta Global generated nearly $1 billion in revenue at the midpoint of 2024 guidance, with guidance for minimum 20% growth in 2025.

— Company projects nine figures of free cash flow over the next 12 months with $418 million in cash on balance sheet, $200 million drawn on credit line, and $350 million available liquidity.

— Operating margins at 20% and 13 consecutive quarters of beating and raising guidance (targeting 14th consecutive beat in Q4 2024).

— When faced with public attacks on company reputation or valuation, respond with documented truth (SEC filings) and operational execution rather than silence; ignore short-term noise and focus on fundamentals and customer relationships.

— Share buybacks at depressed valuations signal management confidence and create shareholder alignment; Steinberg and his executive team personally bought millions of dollars of stock, demonstrating skin in the game.

— Superior product quality, customer relationships built on genuine value exchange, and AI-driven efficiency improvements create durable competitive advantages that withstand reputational attacks; Zeta's clients actively support the company during crisis as a gesture of partnership.