In 2020, Rubicon Project and Telaria merged to form the largest independent platform for content publishers to sell space to advertisers. Since then, the stock of the newly formed company, Magnite (NASDAQ: MGNI) , has seen a meteoric rise. The future for this business continues to look bright, and it's likely that the company will continue to impress -- but Magnite's stock performance might not follow suit.
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The ad-tech company works on the "supply side" of its business: It makes money by taking a cut of ad spots that it helps sell to ad buyers -- the marketers and ad agencies that are trying to reach target audiences with their products and services. For example, suppose that Magnite's client, a streaming video service, has ad space to sell. Magnite sells an ad slot to a marketer for $1 on the client's behalf. It gets to keep a portion of that sale -- the company reports keeping 13% on average, so let's say $0.13 -- as profit; the client gets the other $0.87 from the sale.
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Magnite Stock: Buy, Sell, or Hold?