"Shares of AppLovin , the volatile, mobile game-focused adtech stock, were moving lower last month as the company faced another short-seller attack, software valuations came under scrutiny due to threats from AI, and Google unleashed a new platform for AI game creation, which was seen as a threat to gaming stocks. As a result, AppLovin stock fell sharply last month, closing January down 30%, according to data from S&P Global Market Intelligence."
"AppLovin entered 2026 after a blowout year, with the stock doubling in 2025 on the back of strong growth. However, that's led to doubts about its valuation, especially as software stocks endured a brutal sell-off last month, which seemed partly based on fears of AI and partly based on valuation. Even after last month's decline, AppLovin is trading at a price-to-sales ratio of 31."
"Those fears increased when the stock got hit with another short-seller attack on Jan. 20 after CapitalWatch said that the company had skirted anti-money-laundering controls, among other improprieties. However, AppLovin has faced similar short-seller allegations in the past, and none of them seem to have stuck. It pushed back on the claims, calling them "false, misleading, and nonsensical." Finally, the stock plunged 17% on Jan. 30 in response to Google's launch of Project Genie,"
AppLovin entered 2026 after a blowout 2025, with the stock doubling on strong growth. The stock fell about 30% in January amid scrutiny of software valuations, AI-related fears, and the introduction of a new AI game-creation platform. Reports of a possible SEC investigation into data collection practices and a Jan. 20 short-seller claim about anti-money-laundering controls intensified investor concerns. AppLovin denied those allegations as false, misleading, and nonsensical. The stock plunged another 17% on Jan. 30 after Google's Project Genie launch, and AppLovin still trades at a high price-to-sales ratio around 31.
Read at The Motley Fool
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