Shares of up-and-counter digital advertising Applovin (NASDAQ: AP) plumbing 18.2% in March, according to data from World Market Intelligence S & P.
Applovin already had a rough February, when he was hit by two Short Seller Reports. And while the entire technology sector also has a rough procession, Applovin had another particularly poor month, as he was hit by-Fe you guessed-the-thirds of a short seller report.
On March 27, the manager of a short sales hedgerow fund under the name Muddy Waters published a short report against Applovin.
According to Muddy Waters, Applovin's new digital advertising machine is participating in a number of irreversible tactics to make their digital advertising revenue look better than it would otherwise. Muddy Waters concluded that Applovin's software is essentially scraping user IDs and data from other social media platforms in order to find high -value targets, which Muddy Waters claims to be at odds with the Rules of App Store. The hedgerow reservoir then went on to accuse Applovin of using “re -annuming” methods that boost advertising sales in relation to actual demand.
Overall, Muddy Waters thinks Applovin's new e-commerce advertisers see a 25% to 35% “incremental” demand for their current social media ads, but Applovin's management claimed that spending incremental on its mobile games platform is more like 100%.
Muddy Waters' claims reflect some Panda Panda and Culper short seller companies, which collaborated in a short report against the company in February. And like those short vendors, Muddy Waters believes that Applovin software should be “replanted” from the major app stores, given that these allegations would amount to the app's privacy policy cutting.
In addition, markets were roared with fears about the tariff policies coming out of the White House. Those fears were correct, with the Trump administrations tariff policies unveiled April 2 significantly worse than considered, even by market skeptics. During the month, the entire technology sector plunged, especially digital advertisers. Therefore, the short incremental seller report added only to the beat for Applovin.
It should be noted that short vendors have an obvious motivation for “muddy water” as it were, to reap fear, uncertainty, and doubt in their target companies. Moreover, stocks that have increased a lot in time can also be particularly good targets.