TaskUs, an organization that Fb makes use of average content material on its web site, has come below hearth from hedge fund Spruce Level Capital, which claims the corporate is presenting an excessively optimistic monetary image to traders.
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Hedge fund Spruce Level Capital mentioned it has guess in opposition to the shares of an organization Fb makes use of to display screen controversial message chats, claiming the agency has a sample of portray an excessively rosy image of its enterprise.
TaskUs is considered one of greater than 10 outdoors moderators that Fb at present contracts to find out, primarily based on Fb’s guidelines, whether or not to take away objectionable content material from its web site.
Spruce Level claims that TaskUs’s aggressive place and the content material moderation trade’s prospects usually have each slipped. There are also indicators of alleged money circulation points, Spruce Level Founder and CIO Ben Axler advised The Submit.
“We observe that TaskUs’ unbilled receivables to final 12 months revenues had been rising steadily for 18 months. This development means that TaskUs could have been reserving income forward of receiving collections,” Axler says.
Accenture is the largest participant within the social networking monitoring house. TaskUs generates 28 p.c of its enterprise from the social-networking large.
“There's a chance Fb strikes extra of this work in home and outsources it to fewer suppliers,” Axler added. “We discover proof of accelerating monetary pressure within the [Facebook] relationship, and imagine margins and money circulation are set to contract greater than anticipated.”
Spruce Level Thursday morning launched a slide presentation giving its brief rationale. In response, a TaskUs spokesperson mentioned the report was “designed for the only goal of negatively impacting TaskUs’ share worth for Spruce Level’s personal profit.”
“We're reviewing the report and can take acceptable steps in response to the assertions,” the spokesperson added. “We stay assured in our technique, our price proposition and our means to create worth for our purchasers, teammates and shareholders. We proceed to see a robust progress trajectory and stay up for sharing data on our monetary and operational efficiency throughout our fourth quarter earnings name.”
TaskUs shares on Wednesday closed at $35.59. On Thursday morning, the shares have been just lately off 11.7% at $31.44. The inventory faces long-term draw back threat to buying and selling between $21 and $27 a share, Axler mentioned.
When TaskUs went public in June, the corporate cited a September 2019 market report from the Everest Group which projected 40 to 50 p.c trade progress to $5.8 billion in 2021. In Might, nevertheless, Everest valued the content material moderation market at between $4 billion and $5 billion and projected a decrease 30 to 40 p.c progress price, in response to information from TaskUs competitor Majorel Group.
Elsewhere, Spruce Level is elevating alarm bells concerning the attrition price for TaskUs staff, most of whom are within the Philippines. The fund additionally quotes an nameless former TaskUs govt who claims there may be wage inflation within the Philippines and that wages are going to rise for TaskUs by 10 to twenty p.c.
Spruce Level on July 14 went public with a brief thesis on oat-based drinks maker Oatly which, like TaskUs, has private-equity large Blackstone Group as a significant backer. Oatly shares sine have fallen to round $7 a share from $20 a share.
Blackstone since October 2019 took out $837 million from TaskUs by way of dividends and inventory gross sales, Axler mentioned, so it has already made an enormous return on its roughly $250 million fund funding. Maybe, he mentioned, Blackstone was targeted on short-term earnings moderately than the long-term prospects.
Certainly, Axler mentioned the very fact Blackstone controls listed TaskUs is a part of the explanation he began researching the inventory, and got here to imagine that each Oatly and TaskUs have been exaggerating their progress claims.
Th”is is a blatant try and affect this firm’s inventory worth for the only advantage of a brief vendor,” Blackstone mentioned in a press release. “TaskUs is a trusted associate to many excessive progress know-how firms, which not solely had a profitable IPO but additionally considerably grew revenues and added hundreds of jobs since Blackstone’s funding in 2018.”
Fb didn’t instantly reply to a request for remark. .
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