To introduce some balance here, the bear case against AppLovin centers on allegations of ad fraud, misleading financial reporting, and unethical business practices.
AppLovin has been accused of using deceptive and predatory advertising practices. Reports claim that the company artificially inflates ad click-through rates and app download numbers through tactics like "backdoor installation schemes" and ads designed to click on themselves.
Short-sellers, including Culper Research, Fuzzy Panda Research and The Bear Cave allege that AppLovin's rapid growth is driven by "low-quality" revenue streams from fraudulent ad practices. They accuse it of reverse-engineering advertising data from Meta Platforms and violating app store policies by improperly acquiring user data to boost its revenue growth numbers. I would recommend reading these reports prior to investing.
The company is under scrutiny for allegedly concealing material adverse facts about its AXON 2.0 platform while presenting overly optimistic financial results to investors. Critics argue that these misrepresentations inflated investor confidence in the company's profitability, which explains why the share price was so high and has now largely corrected. This reflects growing investor skepticism about the company's business model, risk profile and future prospects.
A class-action lawsuit has been filed on behalf of investors, alleging that AppLovin misled them about its financial stability and business practices during the period from May 2023 to February 2025. The lawsuits also highlight claims of unethical data practices and violations of laws protecting user privacy, including accusations of tracking children's devices in violation of Apple and Google policies.
Great points - thanks for the feedback, James! Didn’t have time to cover this, but the concerns around ad fraud, data practices, and the lawsuit are valid risks (especially considering they relate to the company's core business).
It’s always good to keep an eye on tech companies… especially now. Thanks for sharing, Jimmy!
Thank you very much, Lara!
To introduce some balance here, the bear case against AppLovin centers on allegations of ad fraud, misleading financial reporting, and unethical business practices.
AppLovin has been accused of using deceptive and predatory advertising practices. Reports claim that the company artificially inflates ad click-through rates and app download numbers through tactics like "backdoor installation schemes" and ads designed to click on themselves.
Short-sellers, including Culper Research, Fuzzy Panda Research and The Bear Cave allege that AppLovin's rapid growth is driven by "low-quality" revenue streams from fraudulent ad practices. They accuse it of reverse-engineering advertising data from Meta Platforms and violating app store policies by improperly acquiring user data to boost its revenue growth numbers. I would recommend reading these reports prior to investing.
The company is under scrutiny for allegedly concealing material adverse facts about its AXON 2.0 platform while presenting overly optimistic financial results to investors. Critics argue that these misrepresentations inflated investor confidence in the company's profitability, which explains why the share price was so high and has now largely corrected. This reflects growing investor skepticism about the company's business model, risk profile and future prospects.
A class-action lawsuit has been filed on behalf of investors, alleging that AppLovin misled them about its financial stability and business practices during the period from May 2023 to February 2025. The lawsuits also highlight claims of unethical data practices and violations of laws protecting user privacy, including accusations of tracking children's devices in violation of Apple and Google policies.
Caveat Emptor!
Great points - thanks for the feedback, James! Didn’t have time to cover this, but the concerns around ad fraud, data practices, and the lawsuit are valid risks (especially considering they relate to the company's core business).
Buyers definitely need to keep an eye on this!