AppLovin Hit by Short Sellers – Behind the $54B Market Cap Drop

[Music] Applovin. So a prominent atte sold its games business to triple dots has recently been a target of multiple short sellers alleging fudulent practices and violation of platform terms of services. In response, Applovin has taken significant steps to defend its reputation to reassure investors. So let's talk about it. The effects of the short sellers. In February, Apploit was worth $150 billion. That's an insane amount of money. But in April 1st, the figure was decreased to 96.11 billion. So this represents a reduction approximately well almost 54 billion equating to drop of 36%. And this is due to the short seller report that came out. So what actions have appl been taken? It it has taken illegal actions. So it engaged a law firm to conduct independent investigation to claims made by the short sellers demonstrating the

company's commitment to addressing these allegations headon. And of course there was the PR rebuttals. So CEO Adam Froggy and CTO Basil Shikin. They've both published blogs. They've really been blogging hard explaining the company's stance on data collection and advertising practices and so forth. taking this really serious with multiple blog posts. Now, the takeaways here are, in my opinion, pretty interesting. So, number one, short sellers have power. We saw this with Roblox. They had power for a hot minute, used the P word. They came pretty hard all until the Hindenburg kind of selfimploded on that attack. But in this one, it seems to be sustained. And that means that the companies have to really especially in the ad tech space have impeccable compliance and communication strategies perhaps even other than blogs to mitigate such vulnerabilities. And also this is a little bit of a cautionary tale for

adtech industry because it really emphasizes the importance of transparent data practices and adherence to platform policies as deviations can lead to severe reputational and financial repercussions. And one a one additional thing for a long time now ever since applovin started growing many prominent platforms have somehow trying to ask me do you know what apploven is doing like like whispers like what's going on? So it's clear that they had a lot of opposition and I think that helped with these coordinated attacks on the company. So Eric what do you think? Well, first of all, you have to like actually articulate what these short sellers are saying, right? Because that's what they're trying to defend themselves against. So, they're basically saying there's unauthorized data collection, which there is, and misleading advertising practices, which there always are. Retargeting of and incrementally concerns. This I don't really know quite well, but I'm sure this is going on as well as which I don't know. Yeah. Every UA person is

like, is that really an incremental ad buy? Yeah. Right. high client churn rates like I don't even know why that's an issue but like nonetheless yeah of course like people come and go from different platform I don't know and then targeting children with inappropriate ads right yes like this happens all the time right regardless of it's not like a a something that they're trying to do but it like happens inappropriate ads are going to children right so like when I look at the list and I listen to what people are talking about like this is like a walk in the park for these ad tech guys this is their business is to manipulate and to adjust trust their systems in order to take advantage of any type of like loophole within the system. Right? So again, when Apple says no more at, no more fingerprinting, fingerprint is not allowed on my system and Apploven immediately adjusts all their systems to go fingerprint, right? That's exactly what these guys are talking about, right? And so they're all dirty, right? And so every time I see these short seller reports, I'm just thinking the same thing. It's like,

yeah, this is advertising. That's why this business is [ __ ] gross, you know? Like only one level above like gambling, you know? It's like this is what the business is, you know? Applo just does it better. Like, and why are you blaming them, right? They [ __ ] are destroying Unity. They're even destroying Facebook. Like, they're beating Facebook at their own game and going after e-commerce. At the end of the day, the other point that I want to make is the market corrected during the same time frame as these short reports, right? And I will say again that these are [ __ ] hedge fund hotels. Okay? These people are trading in and out of these things in the hundreds of millions of dollars and betting against themselves, against each other, and against the market. So, it's like do not buy these stocks. Like, these stocks are not for the faint of heart, right? I will say though that Apploven looks like they are in [ __ ] command control right now, right? Regardless of all this [ __ ] like they are [ __ ] owning the market. Like the e-commerce stuff, like I heard all kinds of great things from GDC about what they're doing with e-commerce stuff. They still own the UA

market. Unity is like nipping at their [ __ ] heels, but they got no chance to compete against Applov because they are just so entrenched, right, in terms of of their position in the market. So, a lot of this stuff is just noise, right? And things will correct in the wash. And man, I would not [ __ ] with Adam, dude. Like, you don't want to [ __ ] with that KKR [ __ ] He's going to go after these guys like like with a vengeance, you know? Like he he doesn't mess around. So yeah, I'm all about app loving even though I think it's [ __ ] dirty as [ __ ] their whole business. So that's my thing. Chris, I think there's a song to summarize your feelings, which is like hate the game, not the player. Yeah, exactly. Something like that. Yeah. Fix the [ __ ] dude. Yeah, you're right. Like they know how to play the game better than anyone else. And I think we should call out these short sellers to your point. And actually, somebody did. like Mishka, the Heisenberg people who went after Roblox, they're out of business because it didn't work. I mean, yes, everyone would talked about it for a couple of days, but Roblox rebounded right after because

there was really not a there there to what they were talking about. And so, I kind of feel like it's the same thing here, which is thank you for telling us everything we already knew about the ad networks. There's nothing new and they were just trying to make money off of calling this stuff out. So, yeah. Yeah, this is just a day in the life of Eric Seaffort, you know, and he loves this [ __ ] right? You know, like, yeah, big deal. Whatever. I wrote about this last week on my [ __ ] blog. Yeah. Yeah. We actually talked about this when this happened back in February. We love what Appven does for the industry. I mean, if you're a marketer, you cannot do UA without having AppLan as one of your top three, if not top two channels. So, it's meta, Google, and AppL. And sure is you know you know unity there maybe a little bit but app like if that goes away our ability to market this industry also goes away on mobile. [Music]