Election Market PredictIt is a Front for Zeta Global (NYSE: ZETA)

AdTech company Zeta Global Holdings has engineered a ‘Zeta 2025 Plan’ stock promotion to coincide with the 2024 election. PredictIt is no…

Election Market PredictIt is a Front for Zeta Global (NYSE: ZETA)
From Zeta Global Holdings’ Disqus comments section on PredictIt.

AdTech company Zeta Global Holdings has engineered a ‘Zeta 2025 Plan’ stock promotion to coincide with the 2024 election. PredictIt is no ‘academic research’ site, despite its claims. Opinion: ZETA is a Strong Sell.

ZETA public market performance through October 10, 2024.

Background

Zeta Global Holdings (NYSE: ZETA) describes itself as “a leading omnichannel data-driven cloud platform.” However, Zeta is really a roll-up of poor quality marketing and data collection companies that serves as a middleman for collecting data off the dregs of the internet

Zeta gathers much of its consumer profiling data through Disqus, a website commenting service that was acquired by Zeta in 2017. When internet users sign up to leave comments on websites with Disqus they consent to Disqus’s very one-sided privacy policy.

In fact, Disqus is extremely important to Zeta’s business model as it’s their primary data collection tool without having to buy commoditized third-party partner data, which all of Zeta’s competitors can also access.

This reliance on Disqus as Zeta’s edge is even noted in risk disclosures on Zeta’s latest annual report 10-K.

“The principal way that we collect individual opted-in data is directly from the consumers when they register or interact with our platform (such as the DISQUS commenting system), or with partners’ services.”

From Zeta’s most recent 10-K.

This then begs the question: If Disqus is Zeta’s edge, then how is Disqus distributed?

Disqus in 2016–2020 Era Election Cycles vs. 2024 Election Cycle

In the past, Disqus was well-known for being the comments section on all types of politicized blogs and content engines, ranging from right-wing sites like Breitbart and The Daily Caller and InfoWars to left-wing sites like The Hill.

Enraged or enflamed by whatever content was posted in the articles, internet users signed up to use the Disqus comments sections to voice their opinions. This is a highly inefficient process at acquiring new users from 2016–2020ish, and acquiring new internet users into Disqus’ capture was done article-by-article.

However, in 2024 most of these types of websites have fallen out of favor.

InfoWars is no more and the relationship with Zeta’s Disqus was ended in 2018.

https://x.com/disqus/status/1026976757604212736

Breitbart is still using Disqus, though web traffic and search traffic are way down and former leader Steve Bannon is serving a prison sentence.

Breitbart Google Trends search volume through October 10, 2024.

This election cycle in 2024, things are different. Instead of harvesting consumer data one-conspiracy-article-at-a-time on a distribution of many political-related websites, Disqus has actually concentrated their efforts on PredictIt, which is a quasi-legal New Zealand prediction market for placing bets on the election that poses as “an experimental project operated for academic purposes” and a .org

PredictIt.org claims to be an experimental project operated for academic purposes under permission from the Commodity Futures Trading Commission.

However, on closer inspection, it’s clearly a very large feeder for Zeta’s Disqus.

Zeta’s data harvest is concentrated. While the Breitbart and similar articles of 2016ish would rack up dozens to low thousands of comments per article, the PredictIt election bet for the outcome of the Presidential Election has over 1.1 million Disqus comments and is currently growing in the 10s of thousands of comments per day.

As of the evening of October 10, 2024. https://www.predictit.org/markets/detail/7456/Who-will-win-the-2024-US-presidential-election
The fact that PredictIt is even an “academic research” project or a “betting site” is mocked among commenters, all of whom have been sucked up into the Zeta machine.
PredictIt users comment on Zeta’s Disqus about being low on cash and using credit cards for their bets on PredictIt vs. competitor prediction market Kalshi.

In summary, Zeta’s “edge” in capturing consumer data and consumer profile behavior their competitors don’t have access to as soon as they do is tied to Disqus, Disqus is losing steam on political sites and is increasingly pegged to PredictIt, and PredictIt is highly concentrated around this election.

Once the election season is over, Zeta loses their edge.

PredictIt has lost popularity almost immediately after the last two elections the prior two cycles, in 2020 and 2022. Data from Google Trends through October 10, 2024.

Zeta’s “Zeta 2025” Plan is an effort to promote the stock through the 2024 election — then what?

Since early 2022, Zeta Chief Financial Officer Chris Greiner and Chief Executive Officer David Steinberg have presented investors a “Zeta 2025” plan.

In fact, a search of “Zeta 2025” on the SEC EDGAR website turns up 8-Ks filed for quarterly announcements.

https://www.sec.gov/edgar/search/#/q=%2522Zeta%25202025%2522&sort=desc

In fact, Zeta has “unofficially” guided investors to this “Zeta 2025” plan and includes disclosure language about it on their investor presentations, supplements, and 8-Ks. However, the “Zeta 2025” plan is absent from 10-Ks and 10-Qs.

From the 8-K, February 23, 2022, when “Zeta 2025” was announced. https://www.sec.gov/Archives/edgar/data/1851003/000119312522049958/d305277dex991.htm

Additionally, we can see Zeta’s “Zeta 2025” plan detailed as part of “Chris Greiner’s Financial Model” in Investor Day 2023 materials, from about 2:50:18 in the below video.

Off Books Employees in India

Core to Zeta’s Plan 2025 is generating FCF and profitability in a way that benefits Zeta’s story through the 2024 election season.

One way Zeta achieves these outcomes is by using off books employees at two firms called “Aptroid Technologies” and “Aptroid Consulting” located in Hyderabad, India. These are not firms with many clients such as Accenture or Tata. Rather, these firms work exclusively for Zeta.

Aptroid is a “sister concern” of Zeta Interactive. From October 10, 2024. https://www.linkedin.com/company/aptroid-technologies/?originalSubdomain=in
https://www.linkedin.com/company/aptroid-consulting-india-pvt-ltd/

It seems that to boost profitability numbers, Zeta has shifted employees to these Aptroid entities to put them off the books of Zeta. These are the campaign managers and such whom Zeta customers ostensibly pay for thinking these are Zeta employees.

In fact, many Indian Aptroid employees were former Zeta employees who moved over. Aptroid employees even refer to themselves as employees of a division of Zeta Global.

Yet, the fact that Zeta is running these teams in India though different entities, even though a number of Aptroid employees seem to communicate that they work for Zeta, is not disclosed to investors.

Also of note is the fact that several former Aptroid employees report on Glassdoor that there is a 2 year bond on employment for new associates, meaning if these young employees don’t work for Zeta/Aptroid for 2 years the employee would have to pay back the employer.

Takeaways

Although Zeta may claim hundreds of millions of profiles on US consumers, their competitors also have profiles on similar amounts of US consumers. This is commoditized.

Zeta’s edge is getting access to the underbelly of the internet — political extremism, consumers who post fecal and masturbation jokes in comments sections, all of the kinds of consumers that often have low financial prowess, low income, and exist on either far side of the political spectrum. These people overshare everything on the internet. It’s easy to get rich profiles built on just a few million people from their subsidiary Disqus, which allows Zeta to market deeper enriched profiles on this type of politically active consumer.

Zeta’s “2025 Plan” is what they are really guiding investors toward to peak equity valuation coinciding with the immediate aftermath of the 2024 US election cycle.

It also bears asking why PredictIt, which is a .org and a purported “academic research” endeavor, even has Zeta’s Disqus installed in the first place. It’s not possible that Disqus isn’t biasing and influencing the bets that are taken. Plus, PredictIt is run by Aristotle, one of the largest data brokerages and services around.

https://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1603&context=iplj

Zeta’s use of undisclosed resources in India, some of whom are recent college grads reporting they were duped into accepting a software job only to enter an email marketing job with a 2 year employment bond, needs to be addressed by Zeta Global.

As many of my South Asian friends joke, “AI” often stands for “An Indian” and “API” stands for “A Person (in) India.”

Having off books entities like Aptroid blasting email spam around from Hyderabad sounds more like “An Indian” than “Artificial Intelligence.”

Does “AI” mean “Artificial Intelligence” or “An Indian” in this recent CNBC interview with Zeta Global CEO David Steinberg from September 25, 2024? How many times is “AI” mentioned?

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This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. Lauren Balik does not represent the interests of any fund or of any investor other than herself. Past performance is not indicative of future results. This content speaks only as of the date published. Any projections, estimates, forecasts, targets, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.