Short Seller Spruce Point Targets DoubleVerify Stock With Strong Sell Research

Short seller Spruce Point has targeted DoubleVerify Holdings Inc DV with a new strong sell report and shares are reacting negatively.

What Happened: Spruce Point on Tuesday published a bearish report on digital media analytics software platform company DoubleVerify. 

The short seller believes DoubleVerify shares face up to 35% to 45% long-term downside risk, suggesting the stock could trade down below the $16 level.

Spruce Point noted that DoubleVerify is under pressure in a saturated price-competitive market. The company is facing increasing competition, which is limiting its growth potential. 

Furthermore, DoubleVerify is struggling to maintain its share in international markets, which have accounted for a large part of the company's growth, the short seller said. 

"After analyzing DoubleVerify's global locations listed on its website, we found that the Company not only frequently changes addresses, but it has actually closed more physical locations than it has opened," Spruce Point said in the report.

The short seller also indicated that DoubleVerify faces numerous issues with product development and recent acquisitions. Spruce Point highlighted "signs of clear challenges" in several areas.

Spruce Point also questioned the legitimacy of the company's billing and financial reporting practices and noted that several insiders have been selling stock. 

Spruce Point said it believes shares of DoubleVerify competitor Integral Ad Science Holding Corp IAS are undervalued and could rise 20% to 30% from current levels.

Benzinga reached out to DoubleVerify for comment on the short seller report, but has not received a response. 

DV Price Action: DoubleVerify shares were down 4.53% at $27.60 Tuesday morning, according to Benzinga Pro.

This illustration was generated using artificial intelligence via MidJourney.