"Shares of AppLovin sank over 16% this week, according to data from S&P Global Market Intelligence. The fast-growing digital advertising company saw selling pressure due to a report from Bloomberg about an investigation into its data collection practices from the Securities and Exchange Commission (SEC). Investigation report Bloomberg reported that the SEC is investigating AppLovin over illegal data collection practices for targeting customers for advertisements."
"AppLovin stock tanked earlier this week on the news, recovered some of these losses, and then slowly saw a decline in its share price along with a broad market sell-off late in the week. The company has been a huge winner in recent years, with shares up 300% in the last 12 months alone. Last quarter, AppLovin's revenue grew 77% to $1.26 billion. In the last five years, its revenue is up 266%, which shows how rapidly its advertising solutions are being adopted."
The SEC is investigating AppLovin over alleged illegal data collection practices used to target customers, with short sellers claiming the company harvested personal data from mobile apps such as TikTok. AppLovin shares fell more than 16% this week following the report and broader market sell-off. The company has shown rapid growth, with shares up roughly 300% over the past 12 months, revenue up 77% last quarter to $1.26 billion, and 266% revenue growth over five years. Potential regulatory fines and limits on ad targeting precision could reduce future revenue. AppLovin currently trades at a premium valuation, with a price-to-sales ratio near 37.
Read at The Motley Fool
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