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J2 Global announced a response to the recent short-selling communications from Hindenburg Research. "It's regrettable and reprehensible that an individual, motivated by personal gain, can distort facts and make meritless claims at the expense of thousands of our hard-working employees and our loyal shareholders," said Vivek Shah, CEO of J2 Global. "While 24 consecutive years of revenue growth, outstanding earnings and cash flow speak for themselves, we won't allow this so-called research to stand unchallenged." J2 Global said in a release, "Hindenburg claims that Jeroen van der Weijden received $20 million for the acquisition of his business, which is patently false. J2 paid approximately $900,000 for Mr. van der Weijden's consulting business in 2015 at which point he became a full time employee of J2 until his departure from J2 in 2018... Despite Hindenburg's confusion about OCV, the purpose of our investment in it has been well documented over the past few years. OCV allows J2 an opportunity to generate solid returns while giving us a window into early-stage and minority investment opportunities that we do not pursue in our acquisition program. To date, OCV has made 12 investments in the technology and biotech spaces. OCV has eight individuals vetting investments including two PhDs on staff with expertise in pharmacology, pharmaceutical sciences, biochemistry and molecular biophysics. COVID-19 has negatively impacted two of the investments for which J2 booked a $9.2 million loss in Q1 2020, while the other 10 continue to show promise. J2 has a $200 million commitment to OCV (not $300 million as described in Hindenburg's report), about half of which has been funded... Hindenburg's characterizations of our Chairman's investing track record are grossly misleading and reckless. Richard Ressler is a Co-Founder and Principal of CIM Group and OFS Capital Management, with more than 30 years of active investing experience in public and private companies, real estate, infrastructure and lending. Since their respective formations in 1994 and 2003, Mr. Ressler has chaired the investment committees of both firms, leading over 5,000 investments across more than 30 separate portfolios and funds, representing approximately $70 billion of invested capital. Calling out 12 investments without any context or order of magnitude is itself intellectually dishonest... Hindenburg baselessly accuses J2 of suspending its dividend as a result of J2's "lack of liquidity." J2 maintains over $600 million in cash and short-term investments on its balance sheet. Moreover, J2 has generated free cash flow in excess of $2.5 billion from January 1, 2007 through March 30, 2020. As we stated at the time, J2 suspended its dividend to redirect that cash to enhance the growth of our various businesses based on the significant number of investment opportunities within J2's portfolio of businesses and the historic returns from prior investments. Furthermore, this step was taken even though it reduced income for J2 insiders. At the time, unvested stock held by management and our board either paid dividends or accumulated dividends, which were then paid on vesting... Hindenburg erroneously claims that the J2 Board of Directors lacks independence. Based on all applicable Nasdaq and SEC rules, J2's Board is independent and evaluates its independence annually... Hindenburg shows a fundamental misunderstanding of U.S. GAAP. As a U.S. company, J2 assesses the fair value of goodwill at one level below the segment level which is the business-unit level...Hindenburg misrepresents J2 CEO Vivek Shah's compensation by failing to include a full explanation of his 2018 compensation and ignores Mr. Shah's 2019 compensation entirely and the detailed information presented on his long-term equity award included in the Company's 2019 and 2020 Proxy Statements... Hindenburg failed to adequately review or incorporate publicly available information about J2 to properly educate itself about our businesses. If it had, then it would clearly have understood that the reason why Cloud Customer ARPU declined is based on lower subscription prices related to our successful IPVanish subscription service. Moreover, Hindenburg fails to disclose that Cloud Customers have increased from 3.17 million in 2018 to 4.04 million in 2019. Furthermore, Hindenburg failed to disclose or understand that the pageview decline in Digital Media from 2018 to 2019, as has been discussed during a number of earnings calls, was primarily due to a reduction in traffic on J2's Snapchat pages that carried little monetization." The company concluded, "Attacks from "short and distort" outfits like Hindenburg ordinarily would not be dignified with a response. However, the attempted impugning of J2's integrity and ethics required a clear and thorough refutation of Hindenburg's baseless allegations and disparaging misrepresentations."