AppLovin labels short-seller reports “nefarious” and “misleading” as shares sink
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AppLovin’s CEO has labelled short-seller reports from Fuzzy Panda Research and Culper Research as “false and misleading” after the firms published a number of accusations about the ad tech company’s business practices.
The research companies’ claims against the ad tech firm include accusations it could potentially inflate its metrics, while also citing a class-action lawsuit accusing AppLovin of tracking users without their consent, including children. They also make a series of other claims in their reports.
Following their publication, shares in AppLovin, which had surged recently following its recent financials, dived by as much as 20% compared to the previous day’s close at the time of writing.
“Own financial gain”
AppLovin CEO Adam Foroughi has released a statement calling out “nefarious” short-sellers “driving down our stock price for their own financial gain”. He said the reports were “littered with inaccuracies and false assertions”.
He added that it does not track children’s data, it has no means to look at another company’s bid data, and that claims of financial and accounting improprieties are “factually incorrect and have no basis whatsoever”.
“It’s also noteworthy that the short reports emerged after our earnings report, where we would be in a period of being unable to respond with financial performance,” said Foroughi.
“We remain focused on executing our strategy, generating strong cash flow, and conducting share buybacks.”
It should be noted that short-sellers effectively bet on a company’s share price falling, from which they make returns. This was recently seen in a Hindenburg Research report that made claims against Roblox, which ultimately did not have much impact on the company’s stock.
As Culper Research stated in its AppLovin report: “You should assume that following publication of any research, we are likely to immediately transact in these securities (by increasing and/or decreasing positions and/or risk exposure), continue to trade in these securities for an undefined time period thereafter, and be long, short, or neutral at any time hereafter regardless of our initial recommendation, conclusions, or opinions.”
