Problems at Perion Network (PERI)
Problems at Perion Network (PERI)
Perion Network (NASDAQ: PERI — $822 million) describes itself as “a global technology innovator in the digital advertising ecosystem.” The company claims to have around 7 billion monthly impressions and says it can capitalize on the $600 billion+ advertisers spent on digital channels. This enthusiasm has sent Perion stock up around ~400% over the last four years and investors are excited about the company’s growth prospects. The Bear Cave isn’t. In reality, Perion is a roll-up of aggressive clickbait sites across the internet and Perion makes money by putting 100s of advertisements on articles like “40 celebrities with exotic pets.” Niche media reporting, recent litigation, and our investigation show the company may be as valuable as its web content.
Founded in Israel in 1999 as Verticon, the company was renamed IncrediMail in November 2000 and renamed Perion Network in November 2011. Today, Perion has around 420 employees and trades on both the NASDAQ and Tel Aviv Stock Exchange. In its communications to investors, the company writes:
“Perion offers investors the ability to participate in the continuing and dramatic shift of advertising spending to digital platforms. Our core AI and machine learning are applied across all of our solutions to optimize search, advertising and publisher platforms. At the same time, our dedicated technology enables us to stay ahead of the competition.”
Last week at the Stifel Cross Sector Insight Conference, Perion’s CEO, Doron Gerstel, emphasized that Perion is “an advertising technology company” and told analysts,
“We came with this hub, which we call the intelligent hub. So, everything that is being connected is connected through the hub. Now, the best way to describe it is like air traffic control. At the middle of all our assets connected to demand side, supply side, and the different pillars into one, that gives us a huge advantage.”
The reality may be less appealing.
The Bear Cave has uncovered a large network of “clickbait” sites that drive Perion’s advertising business. Although not specifically disclosed in its SEC filings, The Bear Cave was able to identify the sites through Reverse WHOIS searches, employee LinkedIn posts, critical media reporting, and similar or identical privacy policies.
Perion’s sites have names like “Boredom Therapy,” “Mental Flare,” “Elite Herald,” and “Pawzilla.” The sites post articles like “Secrets That Costco Workers Are Hiding From The Public” and “20 Surprisingly Cute Pictures of the Kardashians.” Below is a collection of some of Perion’s publications:
