AppLovin Accused Of Fraud In Short-Seller Report

The stock of AppLovin (APP) fell 10% after short-seller Edwin Dorsey accused the technology company of fraud.Specifically, Dorsey accused the company of committing “advertising fraud” in his Bear Cave substack newsletter, sending APP stock sharply lower as a result. Silicon Valley-based AppLovin is an app marketing platform that derives much of its revenue from online advertisements. The critical report arrives with AppLovin’s stock up 712% over the last year.Dorsey said in his newsletter that he believes AppLovin’s rapid rise has been fueled by low-quality revenue growth from “ads that are deceptive, predatory, and at times unclickable.” Dorsey added that AppLovin is often “opaque and difficult to understand.” The bearish report had an immediate impact on AppLovin’s stock, with some analysts speculating that it may cause a bubble to burst in the company’s share price.AppLovin went public in April 2021 and its stock largely traded sideways until last fall when the company reported financial results that were above analysts’ expectations.Prior to the Bear Cave report, AppLovin’s stock had gained 32% this year to trade at $450.01 U.S. per share. The company has not commented publicly on the short-seller report.