Overview

• AppLovin's stock dropped 20% on March 27 following a report by Muddy Waters alleging data misuse, low e-commerce incrementality, and violations of platform terms of service.
• CEO Adam Foroughi has denied the allegations, asserting that the company's practices align with industry standards and accusing short sellers of spreading misinformation.
• The company has retained high-profile attorney Alex Spiro and the law firm Quinn Emanuel to conduct an independent investigation into the claims.
• AppLovin's stock partially rebounded on March 28, rising by 4%, as the company reaffirmed its commitment to transparency and investor confidence strengthened.
• The allegations have raised broader concerns about the ethics and regulatory challenges in the adtech industry, with potential risks of deplatforming and legal scrutiny.