AppLovin Corp. saw a rapid decline in its shares by up to 15% due to Muddy Waters releasing a negative report about the company. This is the third report from a short seller in about a month, with Fuzzy Panda and Culper Research also publishing similar reports earlier on. AppLovin, a company that offers marketing services to app developers, experienced a significant stock surge in 2024 but has since faced a decrease of about 14% this year.

The recent report by Muddy Waters accuses AppLovin of misusing data and breaching the terms of service of various platforms. Previous reports by other short sellers alleged that AppLovin misrepresented the capabilities of its AI platform and pressured app installations to boost revenue. In response, AppLovin has refuted these claims, labeling them as inaccurate and false assertions.

Despite the negative reports, Wall Street remains mostly optimistic about AppLovin's stock, with 21 buy ratings, six holds, and only one sell recommendation. Several analysts, such as those at Wedbush, Benchmark, Citi Research, Bank of America, and William Blair, have defended AppLovin and even viewed the stock price decline as a buying opportunity following the short-sellers' actions.