What Happened?

Shares of mobile app advertising platform AppLovin (NASDAQ: APP) jumped 9.2% in the pre-market session after CEO Adam Foroughi responded to the concerns raised by short-seller Muddy Waters regarding the company's ad targeting methods and competitiveness. He noted that the short seller's report's bias "lies in omission, not evidence." 

Foroughi pointed to APP's explosive growth in e-commerce advertising, reaching a billion-dollar run rate within months, as proof of value delivered to advertisers. This argument was made to reinforce the competitive strength of the AppLovin platform.

After the initial pop the shares cooled down to $272.79, up 4.2% from previous close.

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What The Market Is Telling Us

AppLovin’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was about 22 hours ago when the stock dropped 14.9% on the news that short-seller Muddy Waters revealed a short position in the company and issued a report that raised concerns about APP's ad targeting methods and competitive strengths. This report aligned with concerns raised by Culpers Research and Fuzzy Panda earlier in the year.

AppLovin is down 20.2% since the beginning of the year, and at $272.79 per share, it is trading 46.5% below its 52-week high of $510.13 from February 2025. Investors who bought $1,000 worth of AppLovin’s shares at the IPO in April 2021 would now be looking at an investment worth $4,184.

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