Short-selling news startup didn’t disclose investment in anti-hangover drink

The publisher and co-founder of Hunterbrook Media, the startup newsroom whose parent places stock market bets to profit from its journalism, owns a stake in a competitor to a company that was recently the subject of a critical article.

Hunterbrook Media launched in April amid a storm of calculated controversy over its business model: It would do hard-hitting investigative journalism, building a media business by putting its money where its mouth is and shorting its targets’ stock.

The model has a certain logic. But this newest exposé raises questions about how to trust journalists who are playing the market when they are — as has not been previously reported — also invested in another company in the same space as their target.

The focus of the story is a company called Safety Shot, which makes a drink it claims lowers blood alcohol content and can quickly sober up people who have been drinking. Hunterbrook’s report, edited by founder Sam Koppelman, said the product didn’t work.

But Hunterbrook’s story did not disclose that Koppelman is an investor in another company in the same space, ZBiotics. Koppelman acknowledged, after Semafor reviewed documents showing the investment, that he has a small personal stake in the supplement startup, which on its website promises to help drinkers prevent hangovers.

The pitch is not unlike that made by Safety Shot. While Hunterbrook’s article focuses on Safety Shot’s claim that it sobers you up after drinking, Safety Shot also markets itself as a hangover cure or preventer, the crux of ZBiotics’ product.

“The morning after, that dreaded next day—the sluggishness, the foggy mind, and the lost hours—it’s a relentless adversary,” the homepage of Safety Shot’s website says. “We’ve all been there. It’s time for a game-changer.”

In a statement to Semafor, the company dismissed the similarities between Safety Shot and ZBiotics, which says it relies on a different mechanism (probiotics “engineered to break down acetaldehyde”) to clear your head.

“These aren’t competitors: ZBiotics is a private wellness start-up that makes probiotics, Safety Shot is a NASDAQ-listed company that has claimed a can of its drink can cut your blood alcohol content in half in 30 minutes,” Hunterbrook said in a statement. “Hunterbrook Media reported issues with Safety Shot — and the next day, broke the news that the FDA had opened an investigation into the company based on new findings from a FOIA. We’re glad the story is out there and transparently disclosed the position Hunterbrook Capital decided to take based on the reporting.”

In a text, Koppelman noted he invested in ZBiotics well before Hunterbrook was created, and said his stake in the company is fairly insignificant.

“It was such a small personal check, the ZBiotics team ghosts my emails,” Koppelman said.