AppLovin's share price experienced a dramatic fall of 22% amid allegations from hedge funds Fuzzy Panda and Culper Research claiming the company misleads customers and investors. They argue that AppLovin's Axon 2.0 platform employs questionable methods to inflate advertising sales. Specific accusations include reverse-engineering ad data from Meta Platforms and installing ad software without user consent. CEO Adam Foroughi refuted these claims, describing them as misleading and aimed at harming the company's success. The situation raises questions about regulatory oversight in digital advertising practices.
The accusations include both reverse-engineering, or quasi-stealing, ad data from Meta Platforms, which has been the undisputed leader in artificial intelligence (AI)-powered digital advertising.
It's disappointing that a few nefarious short-sellers are making false and misleading claims aimed at undermining our success, and driving down our stock price for their own financial gain.
The short-sellers called on not only government watchdogs, but also Meta and other big tech companies with app stores to step in and shut down the allegedly shady practices.
After a significant rise in 2024, AppLovin's stock price plummeted 22% following accusations of misleading practices by prominent short-seller hedge funds.
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