AppLovin fires back at short-seller allegations, denouncing reports as “false and misleading”

AppLovin has strongly refuted a series of critical reports from short-seller firms Fuzzy Panda Research and Culper Research, calling the allegations “false and misleading.” The reports accuse the ad tech giant of engaging in deceptive business practices, sparking a sharp drop in its stock value.

The short-seller reports claim that AppLovin has allegedly manipulated its metrics and engaged in unethical user tracking, including collecting data on children without consent. They also cite a class-action lawsuit as evidence of potential misconduct. Following the release of these allegations, AppLovin’s shares, which had recently surged on strong financial results, tumbled by approximately 20% in a single day.

In a swift rebuttal, AppLovin CEO Adam Foroughi dismissed the reports as an attempt by short-sellers to profit from a declining stock price. He condemned the allegations as “littered with inaccuracies” and stated that the company does not track children’s data, access competitors’ bid information, or engage in financial misrepresentation.

Foroughi also pointed out the timing of the reports, noting that they surfaced just after the company’s earnings announcement, a period when firms are typically restricted from addressing financial performance.

Short-sellers profit by betting on a stock’s decline, often publishing critical reports to cast doubt on a company’s operations. Similar tactics were recently observed in a Hindenburg Research report targeting Roblox, though it had little lasting effect on the company’s stock performance.

Culper Research explicitly stated in its report that it actively trades in the securities it analyzes, acknowledging that it could take long or short positions after publication. This practice underscores the financial motivations behind such reports, raising questions about their objectivity.