Applovin Stock Plunges 8.37% Amid Allegations of Deceptive Practices

On April 7, 2025, Applovin's stock experienced a significant drop of 8.37% in pre-market trading, reflecting the ongoing market volatility and investor concerns.

In March 2025, Applovin faced a dramatic 22% drop in its stock price, largely due to allegations made by short-seller hedge funds Fuzzy Panda and Culper Research. These funds accused Applovin of using questionable tactics to artificially inflate its ad sales through its Axon 2.0 digital ad platform. The allegations included reverse-engineering ad data from Meta platforms and making deals with mobile handset and network companies to directly download the company's ad software without user approval, violating leading ad store policies.

The allegations struck at the core of Applovin's business model, which relies heavily on the trust and confidence of its partners and investors. The claims suggested that the company's recent financial performance might be the result of deceptive practices rather than genuine business success, undermining investor trust in the company's management and its ability to deliver sustainable growth.

In response to these allegations, Applovin's CEO, Adam Foroughi, issued a blog post denying the specific accusations and emphasizing the sophistication of the company's AI models. Foroughi stated that the company complies with app store policies and does not "steal" data outside its own ad tech ecosystem. This response aimed to reassure investors and the public that the company's practices are legitimate and that the allegations are baseless.

However, the damage to investor confidence had already been done. The situation highlighted the importance of transparency and ethical business practices in maintaining investor trust, especially for a company that had experienced rapid growth and high valuations. The allegations also raised questions about the broader implications for the tech industry, where trust and compliance are increasingly important factors in determining a company's success.