{
  "docId": "019dd923-622c-750b-8b99-58801594b94c",
  "docSlug": "9551be67f14d",
  "documentTitle": "Perion Network Ltd. (PERI)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2023-05-23 00:00:00",
  "orientation": "landscape",
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  "pageNumber": 6,
  "pageCount": 127,
  "prevPage": 5,
  "nextPage": 7,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 14,
  "notes": "Uses a numbered list with flag icons to highlight specific areas of concern.",
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      "kind": "callout",
      "text": "Can PERI’s Numbers Be Trusted?: Five Things That Should Raise Suspicions That Its Financials Are “Too Good To Be True” And Don’t Pass The Smell Test",
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      "kind": "list",
      "text": "Initial acquisition of Content IQ had just $4k of PP&E and $9m of receivables vanished\nMinimal cash paid upfront for technology acquisitions and at low valuations\nContingent earn-outs not adding-up and minimal payments made indicate failure",
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      "kind": "list",
      "text": "Content IQ acquisition shared the exact same auditor as PERI\nPERI’s audit partner associated with other pump-and-dump style stocks and its audit fee is 0.10% of sales, 4x below industry average\nPERI’s audit chair worked in finance and CEO Gerstel was COO at ESC Medical Systems (Lumenis Ltd) during an SEC review period. Two Lumenis executives were later charged with a fraud scheme to inflate revenues & financial metrics",
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      "kind": "list",
      "text": "1. Suspicious Acquisitions Since 2020 With Large Outperformance\n2. Outlier Financial Results Point To Sales Inflation & Misstatements\n3. Senseless Capital Raising Despite Significant Excess Cash Flow\n4. Immaterial Capex With Abnormal Return On Assets\n5. Auditor Concerns; Audit Chair and CEO Connected To Scandal At Lumenis",
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      "componentId": "946d8e7d-4218-4181-b770-3f90d6a97e63",
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      },
      "kind": "list",
      "text": "$1.5m and $0.3m of revenue and EBITDA per employee are on par with tech giants\nGross vs. net revenue recognition becoming opaque and a critical audit matter\nMisstatements occurring in search data, customer counts, CTV, retail and video sales",
      "attrs": null,
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      "componentId": "e1de9a69-8d6a-4f60-ba29-913fc05a4087",
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      "kind": "list",
      "text": "From 2020-Q1’23 PERI reportedly generated $233m of operating cash flow\nTotal uses of cash over the same time was $108m, leaving it with >$100m excess cash\nWhy did PERI raise $230m of equity but hasn’t used any of the proceeds?",
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      "kind": "list",
      "text": "PERI’s asset-light model is world class if believable. R&D margin 3x below average\nTotal capex spent since 2020 of just $2.2m\nPP&E to tangible assets of 0.6% vs. 10% for industry peers",
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      "kind": "title",
      "text": "Can PERI’s Numbers Be Trusted?: Five Things That Should Raise Suspicions That Its Financials Are “Too Good To Be True” And Don’t Pass The Smell Test",
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  "metrics": [],
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  "frameworks": [
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      "name": "fraud-exposure",
      "slug": null,
      "matchId": "2bc05857-a342-492b-b450-e1ef285aef4c",
      "evidence": "The slide systematically lists red flags to build a case for financial fraud.",
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      "arcName": "Overcoming the Monster",
      "arcSlug": "overcoming-monster",
      "beatName": "Expose Contradiction",
      "beatSlug": null,
      "evidence": "The deck spends most of its pages exposing contradictions and inconsistencies in PERI's financials, partnerships, and growth story.",
      "position": 0,
      "confidence": 0.8,
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  "loops": [
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      "name": "Logic Chain",
      "slug": "01-logic-chain",
      "bestFor": "Skeptical audiences, controversial recommendations, rigorous analysis",
      "matchId": "e972ccdf-c217-46cb-9470-ba2f8b94de5a",
      "evidence": "The deck presents a series of logical and coherent arguments to build a case against PERI.",
      "position": 0,
      "objective": "To present a logical chain of evidence and reasoning to support the conclusion of significant downside risk to PERI's share price.",
      "structure": "Premise 1 (Accepted truth) -> Premise 2 (Observed fact) -> Therefore... (Inevitable conclusion)",
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  "locked": true
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