1Mon·

AppLovin share price falls after accusations of advertising fraud

Hello everyone, what do you think of the situation? Is it a good buying opportunity or would you take flight if you are invested?

$APP (-10.14%)

Shares of AppLovin (NASDAQ: NASDAQ:APP) are down 3% after a scathing short report was released by Fuzzy Panda Research. The report accuses the mobile ad tech company of "advertising fraud" and other dubious practices. According to the report, AppLovin's success, particularly with its machine learning algorithm Axon 2.0, could be based on unethical and possibly illegal activities. These allegedly include data theft from Meta Platforms Inc. and violations of Apple and Google's app store policies.

Fuzzy Panda Research claims that AppLovin's expansion into the e-commerce space is characterized by questionable tactics. These include the "reverse engineering" of metadata and the exploitation of consumer data in a way that violates the terms of use of major app stores. The report suggests that AppLovin's high click-through rates (CTRs) and revenue growth may be due to these deceptive strategies rather than legitimate business practices.

The researchers claim to have found evidence of a "direct download" program by AppLovin. This could allow the company to install apps on consumers' phones without consent. Such practices could not only lead to significant fines from regulators such as the FTC, but could also result in AppLovin's SDKs being banned from both the Apple iOS and Google Play Store.

The report by Fuzzy Panda Research joins previous critical investigations by other short sellers, including Bear Cave, who have targeted AppLovin in the past. The allegations cast a shadow over the company's previously lauded financial performance and cast serious doubt on the legitimacy of its business practices.

Although the company and its CEO Adam Foroughi have been praised for their remarkable growth, the report suggests that the foundations of this success could be at risk. This would be the case if major technology companies such as Apple, Google and Meta were to take action against the alleged abuses.

Investors have reacted cautiously to the news, which is reflected in the fall in the share price. The broader implications for AppLovin's business model and future revenue streams remain to be seen as the market processes the potential fallout from these allegations.

https://www.finanztrends.de/applovin-aktie-unter-druck-auf-diese-marken-kommt-an/

www.finanztrends.deAppLovin-Aktie unter Druck: Auf diese Marken kommt es nun an!

6 Comments

SemiGrowth@SemiGrowth

1Mon

The market doesn't really seem to be taking it seriously yet. I also don't see a problem with "reverse engineering of meta data". And many people probably violate app store guidelines. The question is how blatant the violations are here. Of course, the writer also has an interest in writing in such a way that it sounds like the end of the world.

Even if Google and Apple benefit from higher sales of apps in their stores, I think it's unlikely that they'll be charged economically

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Umut Y.@7digitbaki

1Mon

Schwierig

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Dividendenopi👴@Dividendenopi

1Mon

Seems to be slowly becoming fashionable.... and has recently been hitting stocks that have risen massively in the last 12 months. The market reacts as desired by the short sellers, the first damage is done and the first profits are made by the short seller. Purpose fulfilled. For the time being. Now comes a counterstatement and then we'll see what happens. If the rather detailed allegations in this case are substantiated, then things will look bad for the stock for the time being. Due to the sharp rise, it may seem sensible to take profits and ensure a more peaceful night's sleep and venture a later re-entry. I am not invested and can of course take a more relaxed view of the whole thing.

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Tenbagger2024@Tenbagger2024

1Mon

@Dividendenopi
So if anything about the allegations were criminal, the public prosecutor's office would have been investigating long ago. But I haven't read anything about that so far. I think it's more likely that we're in a gray area here and that the business model can continue in this way.

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JCM@TheStoic

1Mon

@Dividendenopi The model is actually brilliant. This is precisely why reports of this kind will become more frequent over the next few years. Until saturation sets in at some point and market participants no longer take such things seriously.

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JCM@TheStoic

1Mon

Accusing an app manufacturer of data theft is like accusing water of being wet.
I find the practices of these big short sellers more than questionable: they look for a company that has been on a roll in recent years, then publish a short seller report with the most sensational headlines possible and then profit from the subsequent short slide. And the crazy thing is that it works extremely well. So we will be seeing a lot more of this in the near future.

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