AppLovin Stock Plunges: Short-Sellers Strike Again!

Ladies and gentlemen, buckle up! We're diving headfirst into the wild world of AppLovin, a company that's been on a rollercoaster ride this year. On Thursday, March 29, 2025, AppLovin's stock took a nosedive, plummeting 20% in a single day. That's right, folks! The stock tumbled $65.92 to close at $261.70, marking its steepest drop on record. But why the sudden freefall? Short-sellers, that's why!

Muddy Waters Research, the third short-selling firm to publish a report meant to raise significant investor skepticism, claimed that AppLovin's ad tactics "systematically" violate app stores' terms of service by "impermissibly extracting proprietary IDs from Meta, Snap, TikTok, Reddit, Google, and others." In other words, AppLovin is funneling targeted ads to users without their consent. If that's not enough to make your stomach churn, Muddy Waters also alleged that e-commerce advertisers are bailing on AppLovin, with a churn rate of about 23%. That's a massive red flag, folks!

Now, let's talk about the impact on investor confidence. The stock is down 19% in 2025 after Thursday's drop, and that's a big deal. AppLovin's shares soared more than 700% last year, the biggest gain among U.S. tech companies, due to enthusiasm surrounding AppLovin's artificial intelligence technology and the growth it was spurring in its ad business. But now, with these allegations hanging over their heads, investors are running for the hills.

So, what can AppLovin do to regain trust? First and foremost, they need to conduct an independent investigation into the allegations. They've already taken a step in the right direction by retaining Alex Spiro from the law firm Quinn Emanuel. But that's not enough! They need to provide more detailed and frequent updates on their business practices and financial performance. And they need to engage with regulators and industry bodies to address any potential violations of app store rules.

But let's not forget about the potential long-term effects on AppLovin's business model if the claims are proven true. Deplatforming, legal consequences, loss of customer trust, increased scrutiny, impact on stock performance, higher churn rate, reputation damage, and potential exclusion from the S&P 500. These are all serious issues that could significantly impact AppLovin's growth prospects.

Now, let me ask you this: Are you really going to sit on cash while AppLovin's stock is on sale? This is a no-brainer, folks! You need to own this stock! But remember, do your own research and stay informed. The market is a fickle beast, and you never know when it's going to strike again. So, stay tuned, stay informed, and stay ahead of the game!