Short seller The Bear Cave has taken a swipe at Ibotta Inc (NYSE:IBTA) in a new report highlighting slowing growth and collapsing customer and employee relationships.

What Happened: The Bear Cave released a new short report on Ibotta on Thursday, alleging the digital couponing company is a “broken business” that is likely headed lower.

“Since going public, the company's growth has consistently missed expectations and The Bear Cave's review of online commentary finds waning consumer support, severe employee dissatisfaction, concerns of strained partner relationships, and allegations of fraud,” the short seller said.

A representative for Ibotta declined to comment on the short report.

Ibotta set an IPO price of $88 per share and first opened for trading at $117 when it made its public debut on the New York Stock Exchange in April 2024. Shares have trended lower ever since the company arrived on public markets and were last down more than 35% year-to-date, hovering around $41, per Benzinga Pro.

As reported by The Bear Cave, Ibotta reported 43% revenue growth in the first quarter of 2024, 14% revenue growth in the second quarter, 16% growth in the third quarter and negative 1% growth in the fourth quarter. The company also guided for approximately flat growth in the first quarter of 2025.

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The short seller highlighted complaints from customers and former employees on Glassdoor. Some of the complaints allege failed leadership by founder and CEO Bryan Leach. Others suggest that the company has troubled customer relationships and has even asked employees to “stretch the truth” in client-facing roles.

Looking into customer reviews and complaints submitted to the Better Business Bureau, The Bear Cave found that many users claim that it’s easy to create an account, add coupons and get virtual cash back, but it’s difficult to actually withdraw money into bank accounts. The short seller pointed to reviews indicating that Ibotta has closed accounts instead of paying earned cash to customers.

Lastly, The Bear Cave noted that CFO Sunit Patel resigned from his role at the company to pursue another opportunity last week. He was replaced by the company’s audit committee chair on an interim basis.

“With executives and employees leaving, revenue stalling, and shoppers complaining, investors may wonder if the future needs Ibotta,” the short seller said.

IBTA Price Action: Ibotta shares were down 0.4% at $40.56 at the time of publication Thursday, according to Benzinga Pro.

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