MGNI - Perion Network: Clickbait Disaster

June, 10 2024 05:42 PM Magnite Inc.

2024-06-10 17:42:10 ET

Summary

Perion Network Ltd.'s shares plummeted after the company issued another profit warning as a result of its exclusion from Microsoft Bing's search distribution marketplace.
Microsoft Bing is apparently cracking down on so-called "Made for Advertising" or "MFA" sites - content farms with a poor user experience designed solely to maximize ad spend.
Last month, Perion shut down its MFA site network after its business practices had been exposed in an industry report.
In addition, the search division disaster appears to have impacted the company's core advertising business, with customers likely pulling budgets in an attempt to avoid potential association with the company's MFA practices.
Even with Perion Network now trading below cash value and an active buyback program in place, investors should abstain from buying the selloff as the company's near-term prospects remain cloudy. However, with the repurchase program likely to provide some support to the shares, I am reiterating my "Hold" rating on the shares.

Note:

I have covered Perion Network Ltd. ( PERI ) previously, so investors should view this as an update to my earlier articles on the company. ...