AppLovin Stock Falls As Short-Sellers Question Firm’s Ad Tactics
**AppLovin Stock Falls As Short-Sellers Question Firm's Ad Tactics**
By Martin Peers
a day ago
Source: The Information
Shares of mobile gaming ad firm AppLovin fell 15% on Wednesday after two short-selling firms published detailed reports slamming the sustainability of the company's surging ad business, which lifted the stock 712% last year. The high-flying stock has now fallen 38% in the past two weeks and is down slightly for the year to date.
One report, from The Bear Cave, said the company's revenue growth was "low quality," flowing from "ads that are deceptive, predatory and at times unreadable or unclickable." The other, from Culper Research, criticized the company's ecommerce efforts—which has made its ad platform popular with direct-to-consumer brands—as a "smoke and mirrors game."
AppLovin CEO Adam Foroughi said in a blog post the short-sellers were "making false and misleading claims aimed at undermining our success."
AppLovin reported earlier this month that its 2024 ad revenue rose 75% to $3.2 billion, thanks in part to its success in diversifying out of gaming ads into ecommerce. As we reported in December, some commerce marketers had found the return on ads bought on AppLovin was comparable to what they earned on ads placed on Meta, owner of Facebook and Instagram, raising the prospect that AppLovin could take share from Meta.