{"id":22212,"date":"2025-04-26T14:01:47","date_gmt":"2025-04-26T14:01:47","guid":{"rendered":"https:\/\/mysourcefunding.com\/?p=22212"},"modified":"2025-04-26T14:01:53","modified_gmt":"2025-04-26T14:01:53","slug":"breaking-down-short-sellers-claims-about-applovin","status":"publish","type":"post","link":"https:\/\/mysourcefunding.com\/?p=22212","title":{"rendered":"Breaking down short-sellers\u2019 claims about AppLovin"},"content":{"rendered":"

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Last year, the mobile app advertising platform AppLovin enjoyed a meteoric rise, catching the eyes of advertisers and analysts alike. Lately, though, it\u2019s also caught the attention of critics\u2014including, namely, a quartet of short-sellers who have claimed the company\u2019s success is built on sand.<\/p>\n

In March, Muddy Waters issued a report that claimed, among other things, that the mobile gaming ads platform appears to be \u201cimpermissibly extracting\u201d user data, violating the terms and services of ad giants like Apple and Meta. Muddy Waters joined a pile-on of short-seller investigations from other firms including Culper Research, The Bear Cave, and Fuzzy Panda.<\/p>\n

It\u2019s a bout of bad press for a company that had recently become something of a Wall Street darling. At one point last year, AppLovin\u2019s valuation was up as much as 550%; the company reportedly even submitted a last-minute bid for TikTok.<\/p>\n

AppLovin has repeatedly denied the short-sellers\u2019 claims, and in a press release in late March, it announced that it had hired a law firm to \u201cconduct an independent review and investigation into recent short report activity.\u201d When asked for additional comments, AppLovin spokesperson Joshua Grandy pointed Marketing Brew to blog posts the company had recently published. Despite the drama, AppLovin was still considered a \u201cbuy\u201d among most analysts in late March, Bloomberg reported, meaning they still considered the company to be a good investment.<\/p>\n

\u201cWe are fully committed to defending the company, its operations, and its reputation from those seeking to manipulate the market through false narratives,\u201d Adam Foroughi, co-founder and CEO of AppLovin, said in the March press release. \u201cWe will take all necessary steps to ensure the facts are known and to protect our employees, stockholders, and partners.\u201d<\/p>\n

So, what are the claims?<\/strong><\/h2>\n

Both Muddy Waters and Fuzzy Panda accused AppLovin of fingerprinting, a controversial and somewhat ill-defined technique in which ad-tech companies string together disparate data points to identify users. Those data points can range from IP addresses to a user\u2019s operating system.<\/p>\n

That practice has been scrutinized because users can\u2019t opt out, Ari Paparo, an ad-tech vet and founder and CEO of Marketecture, told Marketing Brew. Apple\u2019s App Store explicitly forbids fingerprinting and has taken steps to make it harder to do so on its devices; Google had also forbidden the practice across devices, but it has since made an about-face in the name of its connected TV business.<\/p>\n

Companies that fingerprint are giving themselves an advantage over other tech platforms like Meta, which would have \u201ctoo much to lose\u201d if they were caught fingerprinting, Paparo said.<\/p>\n

AppLovin has faced accusations of fingerprinting before. In 2021, two months after acquiring the mobile attribution company Adjust, Apple accused Adjust of the practice and rejected updates on any apps that used the company\u2019s code. It was a rare move at the time, Ad Exchanger reported, because while many platforms forbid fingerprinting, those bans aren\u2019t widely enforced.<\/p>\n

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In recent months, AppLovin executives have spoken up to defend its business. In February, Foroughi wrote in a blog post that the company\u2019s business \u201cis based on transparency and integrity,\u201d and noted that \u201call of the games we promote are also apps published in the App Store, therefore, they all have to comply with App Store policies.\u201d In another blog post, Foroughi said that AppLovin does not \u201ccreate alternative accurate and persistent identifiers, typically called device fingerprints,\u201d but noted that it could target users based on \u201ccontext\u201d signals, which could include \u201cthe user\u2019s IP range.\u201d<\/p>\n

Those context signals likely aren\u2019t persistent enough to constitute fingerprinting, argued Eric Seufert, a mobile advertising analyst and general partner at the VC fund Heracles Capital. Besides, he noted, \u201cAppLovin is on Apple\u2019s radar as a potential abuser of these rules,\u201d he said in reference to the 2021 Adjust incident.<\/p>\n

Short-sellers have also alleged that AppLovin is simply giving itself too much credit as an advertising platform, a practice Paparo said is commonly referred to as \u201cad-stuffing or cookie-stuffing.\u201d<\/p>\n

Essentially, a platform could hone its algorithms to find consumers who it identifies are already willing to make a purchase and then bombard them with \u201cas many ads as you possibly can\u201d in an effort to get the attribution credit, Paparo explained. It isn\u2019t fraud, or against any given policy, but over time, the practice could potentially turn any platform that does it into a less effective advertising tool.<\/p>\n

\u201cSmart marketers would figure it out,\u201d Paparo said. \u201cYou\u2019re juicing the results and eventually, you\u2019re not producing real incrementality. That\u2019s the argument against it.\u201d<\/p>\n

If that was the case, the platform likely wouldn\u2019t have begun its e-commerce practice with such big advertisers, Seufert said, assuming that big spenders are knowledgeable enough to suss out any issues that could stem from cookie-stuffing. Foroughi has also rejected the claims, writing in a blog post in late March that the tools it uses to measure attribution are \u201cstandard,\u201d similar to those used by Google and Meta.<\/p>\n

The hubbub could also come down to the platform\u2019s communications strategy. AppLovin rarely gives interviews to journalists, and Seufert said the company \u201cdeveloped this culture of extreme secrecy.\u201d Some of its investments \u201ccould be seen as hostile to the interest of their clients,\u201d he added, like acquiring a measurement company and rolling out a gaming company while serving mobile gaming advertisers.<\/p>\n

Generally, he said, people tend to have questions when a company they haven\u2019t heard of hits a major valuation milestone.\u00a0<\/p>\n

\u201cPeople were discovering a $100 billion company for the first time, and that raises suspicions,\u201d he said.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Last year, the mobile app advertising platform AppLovin enjoyed a meteoric rise, catching the eyes of advertisers and analysts alike. Lately, though, it\u2019s also caught the attention of critics\u2014including, namely, a quartet of short-sellers who have claimed the company\u2019s success is built on sand. In March, Muddy Waters issued a report that claimed, among other […]<\/p>\n","protected":false},"author":1,"featured_media":22213,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[78],"tags":[],"class_list":{"0":"post-22212","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-marketing"},"yoast_head":"\nBreaking down short-sellers\u2019 claims about AppLovin | Brandiary<\/title>\n<meta name=\"description\" content=\"Last year, the mobile app advertising platform AppLovin enjoyed a meteoric rise, catching the eyes of advertisers and analysts alike. 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