J2 Global is a digital media roll-up that has acquired 186 businesses since its inception. Its CEO has described the Company’s “acquisition system” as its “single great competitive advantage.”
But on Dec. 12,2018, Glasshouse Research released a forensic report stating J2's “acquisition accounting remains suspect,” and concluding “that management has touted many farce operating metrics that do not show J2's true economic value.”
Then on June 30, 2020, analyst Hindenburg Research issued a series of tweets and published a report regarding J2 Global entitled“J2 Global: Troubling Related Party Transactions, Looming Impairments and a Suspicious History of Insider Enrichment Spanning Decades.” In its report, Hindenburg writes that “J2’s opaque acquisition approach has opened the door to egregious insider self-enrichment, which we approximate totals $117 million to $172 million based on publicly available information.” Hindenburg continued that J2 had recently committed $200 million of shareholder cash to a newly-formed investment vehicle run by its Chairman, who has a track record of venture investment failures. Hindenburg further stated that it found decades of intertwined financial interests between board members and executives, calling several of J2’s directors’ independence into question. Hindenburg also raised “tricky accounting,” noting that J2 has never taken a goodwill impairment, yet the Company’s subsidiaries have reported multiple material goodwill impairments that do not appear to coincide with J2’s financials.
On this news, the price of J2 Global’s shares plummeted.
Investors who have lost money on their J2 Global shares may be able to recover some of those losses, and should contact us using the form below.