(Reuters) -Spruce Point Capital Management said on Tuesday it was short on ad technology firm Perion Network, 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.
(Reporting by Chavi Mehta in Bengaluru; Editing by Maju Samuel)
