Applovin Plunges 6.08% Amid Short Seller Allegations

On April 4, 2025, Applovin's stock price dropped by 6.08% in pre-market trading, reflecting significant market volatility and investor concerns.

On March 27, 2025, prominent short seller Muddy Waters Research revealed a short position in Applovin, leading to a substantial drop in the company's stock price. The report, titled "AppLovin: Deep Data Analysis Shows APP is Just Another Scammy AdTech Company," raised serious allegations about the company's practices, including claims of low incrementality in sales and violations of third-party platform terms of service.

Muddy Waters' report comes on the heels of a recently filed securities class action lawsuit, Quiero v. AppLovin Corporation, et al., which seeks to represent investors who purchased Applovin securities between May 10, 2023, and February 25, 2025. The lawsuit alleges that Applovin made false and misleading statements about its flagship AXON 2.0 digital advertising platform, which the company had heavily promoted as a groundbreaking product leveraging cutting-edge AI technologies.

In addition to Muddy Waters, other short sellers, including Fuzzy Panda Research and Culper Research, have published damaging reports questioning the company's claims and ethical practices. Fuzzy Panda Research alleged that Applovin violated app store policies by exploiting user data and predicted that tech giants Apple and Google would ban the company from their app stores. Culper Research criticized Applovin for using AXON 2.0 as a promotional facade and accused the company of systematic exploitation of app permissions to force-feed silent, backdoor app installations onto users' phones.