Muddy Waters Doubles Down On AppLovin In New Short Report Ahead Of Q1 Earnings

Applovin Corp APP shares are facing selling pressure again after short seller Muddy Waters Research released a bearish report on the company, which follows an initial short report from March.

What To Know: AppLovin shares sold off in March after Muddy Waters announced a short position, calling AppLovin “another scammy adtech company” that relies on retargeting for e-commerce conversions.

AppLovin executives responded to the short report in a blog post that Muddy Waters says includes “demonstrably false” statements. The company also hired a law firm to perform “an independent review and investigation into recent short report activity targeting the Company.”

Muddy Waters on Wednesday alleged that AppLovin continues to use persistent identifiers that violate user privacy and partner’s terms of service, which AppLovin executives denied in a subsequent blog post, the short seller said.

Benzinga has reached out to AppLovin for comment on the report.

“On March 31, Foroughi denied that APP creates or uses persistent identity graphs (PIGs) for users who decline IDFA cross – application tracking. On May 1, APP re-upped Foroughi's lie by recycling his March 31 post in a newsletter to stakeholders,” Muddy Waters said.

“This presentation and the accompanying video show records of web and application traffic that prove these claims to be utterly false. We show that persistent identifiers are created, disguised, and applied to track users across domains and applications.”

The full short report can be found here. Benzinga’s previous coverage is also available via this link.

AppLovin is due to report first-quarter financial results after the market close on Wednesday. Analysts expect the company to report earnings of $1.45 per share and revenue of $1.38 billion, according to Benzinga Pro. Investors will be watching for a potential response from the company in the earnings call, scheduled for 5 p.m. ET.

APP Price Action: AppLovin shares were down 2.4% at $297.30 at the time of publication Wednesday, according to Benzinga Pro.

AppLovin shares are down about 8% year-to-date, but the stock is still up more than 300% over a one-year period.

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