IZEA Worldwide, Inc. (IZEA) Accused of Overstating Its Content Revenue
Purchasers of IZEA Worldwide, Inc. (IZEA) have filed a shareholder action against the company’s officers and directors for breaches of their fiduciary duties from May 15, 2015 through the present. IZEA Worldwide, Inc. (IZEA) generates revenue from various sources, including content revenue from purchases of custom branded content for use on the purchasers’ sites, as well as third party content marketing and native advertising efforts. In January 2015, IZEA acquired Ebyline and its technology platform that was created to source and compensate creators for the creation and delivery of editorial content. According to the complaint, during the relevant period, IZEA described revenue from Ebeyline as content revenue and represented that it had a significant effect on IZEA’s overall gross profit percentage. On April 2, 2018, IZEA revealed an error in accounting for revenue and cost of sales related to the self-service Content Workflow (previously known as content revenue) portion of the company’s revenue. Then, on April 3, 2018, IZEA reported that the company’s financial statements from 2015 onward should no longer be relied upon. Specifically, the amount previously reported as gross profit on Content Workflow should be the amount reported as revenue. The price of IZEA stock fell on this news, and the stock continues to decline.
IZEA Worldwide, Inc. (IZEA) Shareholders Have Legal Options
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