AppLovin Stock Plummets 20% Following Muddy Waters' Fraud Allegations
The short-seller claims AppLovin's growth relies on retargeting, data misuse, and violations of platform rules, raising regulatory and competitive concerns.
- AppLovin's stock fell 20% on March 27, marking its steepest single-day decline to date, and is now down 19% year-to-date after a 700% surge in 2024.
- Muddy Waters alleges that 52% of AppLovin's e-commerce sales come from retargeting, with only 25%-35% representing new business, questioning the company's growth sustainability.
- The report accuses AppLovin of violating platform rules by improperly collecting user IDs from partners like Meta, Snap, and TikTok, risking deplatforming or increased competition.
- Muddy Waters' analysis highlights a 23% churn rate among AppLovin's e-commerce clients in Q1, suggesting advertisers are losing confidence in its services.
- AppLovin's CEO, Adam Foroughi, has denied the allegations, labeling them as misleading attacks by short-sellers aiming to profit from the stock's decline.
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