Short sellers strike again 🩸 $APP
🩸 AppLovin stock crashes about 20% following a damning Muddy Waters report 🔪
Short seller fund Muddy Waters dropped a bombshell: an investigative report accusing the company of questionable practices that could lead to its removal from the world's largest advertising platforms.
Friends, this is the third short report against APP since the beginning of the year, please take note 🤨
📉 What does Muddy Waters reveal?
The report presents a disturbing picture of the company's activities and raises serious suspicions:
🚨 Data fraud According to the fund, a significant portion of the conversions AppLovin reports are not new transactions, but rather retargeting of existing users. While the company boasts nearly 100% incrementality, the report estimates the true number is only 25%-35%! 🚩
⚠️ Identity theft The company is accused of "milking" proprietary identifiers from platforms like Meta, TikTok, Reddit, Google, and Snap, which could constitute a serious violation of terms of service and lead to heavy sanctions.🔖
🧨 Is it going the way of Cheetah Mobile? Muddy Waters hints that AppLovin could follow in the footsteps of Cheetah Mobile, which was previously suspended from advertising platforms precisely because of such conduct.💩
⛈ What else is troubling?
⏺ Suspicious discrepancies between company statements and reality: The CEO previously claimed that e-commerce advertising incrementality was almost perfect, but in practice, data shows a 23% over-rollover rate among beta advertisers – suggesting potential manipulation.
⏺ Use of questionable technologies: The report claims the company uses indirect methods like PIGs (persistent identity graphs) to circumvent privacy restrictions and perform aggressive ad targeting without user consent – a sophisticated, but risky, maneuver.
⏺ Is it truly competing with Meta and Google? While tech giants rely on first-party data with user consent, AppLovin allegedly manages to target ads with unexplained precision – is it truly groundbreaking, or simply breaking the rules?
⛔️ This report strikes directly at the heart of the company's business model. If platforms decide to block it – revenues could plummet, and the company would face an existential challenge. 🔥
All of this is happening while user privacy regulations are already making it difficult for digital advertising networks to operate. ☄️
🎤 AppLovin has not yet responded to the report, but the market is already reacting – and the stock is in freefall! 📉