By George Glover
AppLovin stock jumped Friday paring some of its losses after plunging 20% in the previous session following a short-seller report.
Shares climbed 9.5% to $286.60 in Friday's premarket. Futures tracking the benchmark S&P 500 were down 0.2%.
The advertising technology company's stock plummeted 20% on Thursday after Muddy Waters Research revealed it had taken a short position.
The investment firm's report said that AppLovin was "impermissibly extracting proprietary IDs" from the likes of Meta, Snap, TikTok, Reddit, and Google as a way "to target ads without user consent," which was likely a violation of the platforms' terms of service.
AppLovin didn't immediately respond to a request for comment from Barron's.
"Our business is technical, and we get it -- it's not always easy to understand," AppLovin CEO Adam Foroughi said in a blog post Thursday.
"This complexity leaves room for short reports to stir fear and doubt," he added. "To investors, I'd say: dig deeper. Given the AI tools available today, it's easy to discredit a short report like this in minutes."
"The message was clear: AppLovin's success is rooted in sophisticated technology and operational rigor, not opaque or unethical practices," Benchmark analyst Mike Hickey said in a research note where he discussed Foroughi's blog post. He maintained his Buy rating on the stock, with a $525 price target that implies shares can climb 101% from their current level.
Short-sellers Fuzzy Panda Research and Culper Research also issued negative reports on the company last month. Foroughi said at the time in a blog post that it was "disappointing that a few nefarious short-sellers are making false and misleading claims aimed at undermining our success."
Write to George Glover at george.glover@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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March 28, 2025 08:10 ET (12:10 GMT)
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