Zeta Global's Form 144 Filing: Navigating Affiliate Share Sales and Regulatory Compliance

Julian WestFriday, May 9, 2025 9:36 pm ET
20min read

Zeta Global Holdings Corp. (ZETA.US), a leader in AI-driven marketing technology, has drawn attention following a Form 144 filing by a related party, Family Trust No. S4, which plans to sell 709,300 shares of Class A Common Stock valued at approximately $9.47 million. This move underscores the importance of regulatory compliance for related-party transactions while highlighting broader market dynamics impacting the company.

Regulatory Context: What Form 144 Requires

Form 144 filings mandate public disclosure of securities sales by affiliates, insiders, or beneficial owners of ≥10% of a company’s equity. Key requirements include:
- Timing: The sale must occur within 90 days of the filing and be preceded by a public notice.
- Volume Limits: Affiliates may sell no more than 1% of outstanding shares in a 90-day period.
- Transparency: Prior sales of the same securities in the preceding 90 days must be disclosed.

For Zeta Global, the Trust’s filing adheres to these rules, with the shares acquired via estate planning transfers from the trust’s settlor (original holder since January 1, 2015). The sales are structured under Rule 10b5-1 trading plans, which prearrange transactions to avoid accusations of insider trading.

Zeta’s Specific Filing Details

The Form 144 filing reveals two key transactions:
1. April 22, 2025 Sale:
- 182,047 shares sold via Merrill Lynch, valued at $2.1 million.
- Represents 0.17% of Zeta’s 109 million outstanding shares as of April 2025.

  1. Prior Sales (2024–2025):
  2. A March 20, 2025 sale of 123,890 shares, generating $1.78 million.
  3. Combined with subsequent sales, the Trust’s total sales since December 2024 reached 728,204 shares, aligning with the $9.47 million valuation.

The Trust’s address (105 Chestnut St., Needham, MA) and role as an affiliate stockholder are explicitly disclosed, complying with SEC mandates for transparency.

Market Impact and Regulatory Risks

ZETA Trend
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1. Share Dilution and Liquidity:
- The 709,300 shares represent 0.65% of Zeta’s total float, minimizing immediate dilution concerns. However, the Trust’s sales could pressure short-term prices if executed during volatile market conditions.
- Zeta’s market cap of $2.7 billion (as of April 2025) provides a buffer against such impacts.

2. Regulatory Scrutiny:
- While the sales comply with Form 144 rules, Zeta faces broader regulatory headwinds. Its revoked municipal advisor registration (a separate compliance issue) signals heightened scrutiny but does not directly affect the affiliate transaction.
- The Trust’s use of a 10b5-1 plan mitigates legal risks by demonstrating pre-arranged, non-insider-driven sales.

Financial Performance and Strategic Positioning

Zeta’s Q1 2025 earnings underscore its resilience despite regulatory challenges:
- Revenue: $264 million (+36% YoY), driven by its AI-driven CDP+ platform and Agile Intelligence Suite.
- Margin Expansion: Adjusted EBITDA rose 53% to $47 million, with margins improving to 17.7%.
- Customer Growth: 548 scaled clients (≥$100k annual spend), a 19% YoY increase, with retention rates exceeding 90%.

These metrics align with Zeta’s 2028 targets of $2.1+ billion in revenue (20% CAGR) and 25% EBITDA margins, suggesting long-term strategic momentum.

Investor Considerations

  1. Risk Factors:
  2. Regulatory Uncertainty: While the municipal advisor revocation is non-operational, it may deter risk-averse investors.
  3. Share Sales: Monitor the Trust’s sale timing to assess potential price volatility.

  4. Growth Catalysts:

  5. AI-Driven Solutions: Zeta’s leadership in customer data platforms (CDP) positions it to capitalize on rising demand for AI in marketing.
  6. Free Cash Flow: Projected to hit $340 million by 2028 (65% of revenue), signaling scalability.

Conclusion

Zeta Global’s Form 144 filing by Family Trust No. S4 reflects prudent estate planning and regulatory compliance, with the 709,300-share sale posing minimal immediate risks to investors. The Trust’s adherence to Rule 10b5-1 trading plans and transparency in disclosures mitigate legal concerns, while Zeta’s robust financials—36% YoY revenue growth and 17.7% margins—highlight operational strength.

However, investors must remain vigilant about regulatory tailwinds and the broader marketing tech sector’s competitive landscape. With $2.7 billion in market cap and a 15-quarter streak of revenue growth exceeding 20%, Zeta’s fundamentals remain compelling, provided it navigates its regulatory environment effectively.

Final Take: A Hold rating with a Buy tilt for long-term investors, contingent on execution of its 2028 targets and regulatory clarity.

Data as of June 2025. Past performance does not guarantee future results.