How an Activist Investor Rationalizes Buying More Shares in a Flailing Software Company

On November 14, in an act that could only be described as gleefully contradictory, Manatuck Hill Partners announced it had added a hefty 415,000 more shares of Zeta Global-an enterprise that has, over the past year, plummeted 26% and seems to be whispering its way into obscurity. The fund’s new stake might be worth around $9.5 million, but it feels more like a hefty tip to a restaurant that’s already known for poor service-ambitious, perhaps, but one wonders if anyone is still hungry.

What Happened

Apparently, amid the cluttered chaos of SEC filings, Manatuck Hill decided that piling more money into Zeta was a wise move-adding 415,000 shares to their existing 290,000, bringing their total to a staggering 705,000. As of September 30, those shares were valued at $14 million, which, when you think about it, is a lot of money to sink into a company whose shares now languish at $19.05, battered down by a relentless 26% slide over the last year. It’s like investing in a sinking ship, then somehow deciding to buy more life jackets.

What Else to Know

Zeta now accounts for 4.6% of Manatuck Hill’s reportable assets, which sounds impressive until you remember that the whole fund probably contains more stories behind the scenes than actual assets-like a box of assorted chocolates, most of which seem to have lost their flavor. Their other top holdings include the likes of The RealReal and IMAX, which, if nothing else, suggests that the fund specializes in either distressed assets or perhaps just likes the idea of watching things crash and burn in slow motion.

For context, Zeta’s shares are down a gruesome 26% in the past year, a statistic that might cause a family member to hide their eyes or question your understanding of financial stability. Meanwhile, the broader S&P 500 has gained 13%, as if to remind us that while the world spun upward, Zeta was busy doing its best impression of a fallen soufflé.

Company Overview

Metric	Value
Revenue (TTM)	$1.2 billion
Net income (TTM)	($22.8 million)
Market capitalization	$4.7 billion
Price (as of market close Friday)	$19.05

Company Snapshot

Zeta Global offers an omnichannel, cloud-based marketing platform-not unlike the technological equivalent of a Swiss Army knife-aimed at consumer intelligence, automation, and data solutions.
Their revenue flows from enterprise subscriptions and analytics-like a subscription to a gym you rarely visit, but with more data and less sweat.
The company presents itself as serving giants and organizations that want to harness the chaos of consumer behavior for profit-an endeavor akin to trying to herd cats with a laser pointer.

In the end, Zeta Global operates in the sprawling tech universe with a promise that sounds much like a mirage: the ability to predict consumer intent and maximize marketing efforts through sophisticated algorithms and a proprietary data trove. It’s a lot of words for a company that seems to hover just above the precipice of profitability, yet still manages to convince investors that the future is just around the digital corner.

Foolish Take

This move-buying more in a stock battered and battered-seems like a vote of confidence from someone who might have too much faith in the magic of technology and not enough in the fact that, sometimes, your stocks go down because they’re fundamentally flawed. Despite a 26% decline this year, Zeta reported its 17th straight quarter beating analyst expectations-growth, margins, free cash flow, all seemingly defying the laws of logic and gravity.

It’s as if they’re trying to hide the cracks by plastering on more numbers, more promises for 2026, and a growing list of “super-scaled” customers. An investor with a penchant for optimism might see this as a “turnaround,” but I see an elaborate game of hoping the band plays a few more tunes before the Titanic hits the iceberg.

Conviction, they call it-though I’d argue that concentrating capital in a seemingly stubborn company is more akin to holding onto a balloon while it drifts toward certain deflation. Still, the fundamentals-cash flow, customer metrics, and the all-important revenue guidance-are like a shaky foundation, but at least it’s a foundation.

Glossary

13F reportable assets: Securities that the folks managing the money are required to unveil quarterly-like revealing their hand in a game they’re losing.

Assets under management (AUM): The total market value of everything they claim to be managing-like a sad pile of Monopoly money that’s supposed to look impressive.

Omnichannel: The push to smoosh together all kinds of communication streams into one seamless, customer-friendly mess.

Machine learning: Peppering computers with data until they learn to predict human behavior-an endeavor that usually ends with someone asking, “What could possibly go wrong?”

Proprietary data set: The exclusive collection of information that they guard like a family secret-because keeping secrets is what big companies do best.

Enterprise software subscriptions: Monthly payments by corporations-think of it as a high-tech gym membership that nobody really uses but keeps paying for anyway.

Data analytics services: The art of taking mountains of data and finding some pattern, much like looking for a needle in a haystack-except now the needle is a business insight.

Trailing one-year return: The reflection of the past year’s performance-like looking at your childhood photos and wondering what you were thinking.

Quarter: A quarter of a year-three months-a period so short, it’s almost embarrassing to call it a measuring stick.

TTM: The last twelve months, where everything past is history, and everything ahead is just a hope.

Market close: The moment to finally step away from your screens and pretend you understand what happened all day.

Opted-in data: Information gathered from users who’ve given consent-probably after signing a lengthy, confusing agreement nobody reads.

In summary, whether or not you’re betting the farm on Zeta, it’s clear that this game involves a lot of hope, a dash of stubbornness, and an awkward dance around the truth-like trying to fix a leaky faucet with duct tape. We’re all just hoping someone, somewhere, figures out how not to drown in the flood of digital promises.

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2025-12-08 12:32