On January 7, 2021, Spruce Point Management released a report detailing Magnite’s dubious business practices and potentially misleading financial statements. In particular, Spruce Point’s report discussed: (1) Telaria’s business woes prior to its merger with Rubicon to create Magnite; (2) Rubicon’s business woes prior to its merger with Telaria; (3) discrepancies in Telaria’s 2019 Capital Expenditures; (4) Magnite removing nearly $9.3 million in “Other Assets” following the merger; (5) Magnite’s misrepresentation regarding its “Supply Path Optimization,” initially describing 2019 as a period of “acceleration” but later calling it “slow”; and (6) Magnite’s questionable financial reporting method which may be hiding indicators of financial challenges for Telaria.

On this news, Magnite shares fell $1.70, or 6.2%, from closing at $27.31 on January 6, 2021, to close at $25.61 on January 7, 2021.

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