AppLovin Shares Plunge 15% Amid Short Sellers' Allegations

Shares of AppLovin fell dramatically, dropping over 15% amidst critical reports from short sellers alleging potential fraud and misrepresentation in its AI-powered advertising software, AXON 2.0. The reports from Fuzzy Panda and Culper Research claim that the platform is more of a promotional tool than a genuine AI solution, suggesting that AppLovin has been engaging in dubious practices such as facilitating silent app installations and manipulating e-commerce traffic. Despite the stock's meteoric rise of over 500% in the past year, driven by investor enthusiasm for its AI capabilities, these allegations have spooked the market, leading to significant sell-offs. Analysts remain cautiously optimistic, however, with many maintaining buy ratings and projecting a potential upside for the stock. AppLovin's CEO, Adam Foroughi, faces scrutiny over his past in controversial advertising practices, further complicating the company's standing. The unfolding situation raises questions about the sustainability of AppLovin's business model as investor confidence wavers.