Shares of AppLovin plummeted 12% on Wednesday as two short seller reports cast doubt on the integrity of its AI-powered AXON advertising software. The reports from Fuzzy Panda and Culper Research claim that the company is engaging in fraudulent advertising tactics, including stealing data from Meta.
The news comes after a stellar fourth-quarter earnings beat in February, which kept Wall Street optimistic about AppLovin’s prospects. However, the short seller reports have raised concerns about the company’s business practices. Fuzzy Panda alleges that AppLovin has built its success on exploiting consumers and their data, violating Google and Apple’s app store policies.
AppLovin CEO Adam Foroughi has responded to the claims, stating that the reports are “littered with inaccuracies and false assertions.” He emphasized that the company’s AI models are designed to enhance advertising for partners, not undermine them. The reports have also raised questions about AppLovin’s mobile gaming segments, which have driven significant revenue growth.
The short seller reports come as AppLovin continues to expand its AXON model into new e-commerce sectors, including healthcare and automotive. Despite the negative sentiment, AppLovin’s stock surged over 700% in 2024, making it one of the biggest beneficiaries of the AI boom coupled with online advertising growth.
Source: https://www.cnbc.com/2025/02/26/applovin-shares-tumble-as-short-sellers-target-axon-ad-software.html