🖥️ DoubleVerify: Extract The “Ad” Out Of “Fraud”?

Apple helps to fight Covid-19. GM spends on diversity!

Hey Global Investor, here’s what you need to know before the US markets open.

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🖥️ DoubleVerify: Extract The “Ad” Out Of “Fraud”??

DoubleVerify (DV) debuted on the NYSE last week, becoming the 14th company to go public this year through the traditional IPO process. In doing so, the ad verification and measurement company became the latest ad-tech to leap just as some of its brethren have done earlier.  (Tweet This)

Digital media consumption is at an all-time high, especially given billions of people are forced to spend time at home due to the pandemic. Simultaneously, fake news and bots have played havoc and have helped spread misinformation far and wide.

What does this add up to in terms of losses for the online advertising industry? $42B to be precise, according to circa 2019. With 68% of ad spends in the US expected to go fully digital by 2024, that number is sure to increase. This is where companies such as Magnite, Pubmatic, and Trade Desk develop solutions to combat ad fraud.

Add DoubleVerify to that list – a company that develops verification and compliance software to measure digital engagement and prevent ad fraud. Founded in 2008, the NY-based company works with 1K+ companies, including Google (GOOG), Facebook (FB), and Amazon (AMZN). DoubleVerify has chosen an opportune time to go public, given that IPOs are generally received well by investors. Moreover, the company’s revenue is up 34% Y-o-Y to $244M in 2020 with adjusted operating profits of $73M.

What Happened?
CEO Mark Zagorski sees DoubleVerify as a force for good, tackling digital advertising fraud, ensuring brand alignment, and brand safety, while measuring people’s digital engagement everywhere, on every device. Investors bought into this vision as DoubleVerify successfully raised around $360M in the initial public offering. Shares were offered at $27 a piece and jumped 33% to end the day at $36.

Growth through M&A is always an option with the company having made three acquisitions in the last three years. The market itself is growing and that makes it attractive to investors. Case in point: Tiger Global bought $60M worth of stake in the company from majority shareholder Providence.

DoubleVerify will continue to connect legitimate ad buyers and sellers through product innovation and organic growth. The company will shift its focus to audio and podcast platforms as ad-fraud increases in the sector. Competition is intense with Google jumping into the fray with its own ad-fraud protection tools. So the battle lines are being drawn in this up and coming space.

Market Reaction
DV closed the day down 4.28% at $34.24.

Company Snapshot 📈

DV $34.24 −1.53 (4.28%)

Newsworthy 📰

Helping Hand: Apple to help workers get COVID-19 shots at its offices (AAPL +1.80%)

Diversity: GM commits to doubling ad spending with Black-owned media (GM +1.54%)

Rewarded: Netflix’s Reed Hastings exercised $612 mln from stock options in 2020 (NFLX -0.63%)

Fun Fact of The Day 🌞

Earth’s Molten Iron Core Creates a Magnetic Field

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