Shares of AppLovin (APP 7.62%), the volatile adtech stock, gained today after the company upgraded its share buyback program in a filing after hours on Friday.As of 11:06 a.m. ET, the stock was up 4.8% on the news. AppLovin increases share buybacksAppLovin, whose shares have fallen roughly 35% since their post-earnings pop a few weeks ago, said that it would amend its share buyback program, which currently has $1.77 billion available for repurchase.Previously, the amount AppLovin could repurchase in a quart ...

Now, the company is under attack from short-sellers, with two short reports published last week claiming the company is using dishonest advertising practices.AppLovin ( APP ) skyrocketed over 400% in 2024 as earnings and revenues exploded higher.This is a high-risk/high-reward opportunity, which is exactly what I look for in my YOLO portfolio.Joint the Pragmatic Investor today to get insight into stocks with high return potential.You will also get:- Weekly Macro newsletter- Access to the End of The World an ...

Core Insights - AppLovin has transitioned from a mobile game publisher to a highly profitable ad tech company, resulting in a stock price increase of over 500% in the last year [1][3] - The advertising business is the primary growth driver, with Q4 revenue rising 44% to $1.37 billion and advertising revenue increasing 73% to $999.5 million [2] - The company is selling its mobile games business for $900 million while retaining a minority stake [1] Financial Performance - AppLovin reported adjusted EBITDA of $848 million and GAAP net income of $599.2 million, achieving a profit margin of 44% [2] - For Q1, the company expects revenue between $1.3 billion and $1.5 billion, indicating more than double the growth from the same quarter last year [7] - Projected adjusted EBITDA for Q1 is between $805 million and $825 million, showcasing the business model's profitability [7] Market Expansion - AppLovin is expanding its ad business beyond gaming into new verticals such as e-commerce, fintech, and automotive [5][6] - The company has identified an addressable market of over 10 million businesses that could benefit from its platform [5] - Plans include enhancing technology with AI models and launching a self-serve dashboard similar to offerings from competitors [6] Valuation and Market Position - AppLovin's stock trades at a price-to-sales ratio of 28 and a price-to-earnings ratio of 83, which is considered reasonable given its growth rate [8] - Despite mixed results from direct-to-consumer brands testing the platform, the company is focused on improving its product [9] - 2025 is anticipated to be a critical year for AppLovin, with high expectations for maintaining growth and margins [10][11]

Core Viewpoint - AppLovin's shares fell 22% this week following accusations from short-seller hedge funds regarding misleading practices in its advertising operations [1] Group 1: Company Performance - AppLovin was the best-performing technology stock in 2024, with a 714% increase, and had a strong start in 2025 after a robust Q4 earnings report [1] - The company’s Axon 2.0 digital ad platform is at the center of the controversy, accused of using dubious tactics to inflate ad sales [2] Group 2: Accusations from Short-Sellers - Short-seller firms Fuzzy Panda and Culper Research published research claiming AppLovin engaged in reverse-engineering ad data from Meta Platforms [3] - Allegations also include making deals with mobile handset and network companies to download ad software without user approval, violating app store policies [3] Group 3: Company Response - AppLovin's CEO Adam Foroughi responded to the allegations, stating they are false and aimed at undermining the company's success for financial gain [4] - Foroughi denied specific claims regarding non-compliance with app store policies and data theft outside its ad tech ecosystem [5] Group 4: Investor Considerations - Investors are advised to monitor the situation closely, as short-sellers often target stocks that have seen significant rallies [6] - Understanding AppLovin's technology and management background is crucial for investors to assess the validity of the short-sellers' claims [7] - If the allegations are proven false, this may present a buying opportunity for investors in a high-performing stock [7]

Core Viewpoint - Robbins Geller Rudman & Dowd LLP is investigating potential violations of U.S. federal securities laws involving AppLovin Corporation, focusing on false or misleading statements made by the company and its executives [1] Company Overview - AppLovin engages in building a software-based platform for advertisers to enhance the marketing and monetization of their content [3] Recent Developments - On February 26, 2025, Fuzzy Panda Research published a report alleging ad fraud by AppLovin, while Culper Research released a report accusing the company of illegal tracking and unethical practices. Following these reports, AppLovin's stock price fell by more than 12% [4]

Core Viewpoint - AppLovin Corporation's stock price dropped significantly by $46.06 (-12%) on February 26, 2025, following allegations from short seller research firms regarding the company's AI ad technology, AXON 2.0, which has been a key driver of its revenue growth and ad performance [1][3]. Company Overview - AppLovin is a software-based platform that assists advertisers in enhancing marketing and monetization of their content [1]. - The company has promoted AXON 2.0 as its fastest-growing product, claiming it significantly boosts ad performance and installs [2]. Investigation and Allegations - Hagens Berman is investigating potential misconduct by AppLovin, focusing on whether the company misled investors about AXON 2.0's capabilities and its role in revenue growth [2][5]. - Reports from Fuzzy Panda Research and Culper Research raised concerns about AppLovin's representation of AXON 2.0, suggesting it may be a smokescreen for other revenue drivers [3][4]. Financial Impact - The negative reports led to a loss of over $13.7 billion in shareholder value on February 26, 2025 [4]. Specific Findings - Fuzzy Panda's report accused AppLovin of ad fraud and illegal practices, predicting potential removal from app stores by Apple and Google [4]. - Culper Research concluded that AXON 2.0 is primarily a promotional tool rather than a genuine AI-driven product, with claims of exploiting app permissions for profit [4][6]. Whistleblower Information - Whistleblowers with non-public information about AppLovin are encouraged to assist in the investigation, with potential rewards from the SEC for original information leading to successful recovery [7].

Core Viewpoint - Rosen Law Firm is investigating potential securities claims on behalf of shareholders of AppLovin Corporation due to allegations of materially misleading business information [1] Group 1: Allegations and Impact - A report by Fuzzy Panda Research accused AppLovin of engaging in "Ad Fraud" and unethical practices, including data theft from Meta Platforms and violations of app store policies [3] - Following the report, AppLovin's stock price fell by 12% on February 26, 2025 [3] Group 2: Legal Actions and Investor Rights - Rosen Law Firm is preparing a class action to seek recovery of investor losses, allowing affected shareholders to join without out-of-pocket fees [2] - The firm emphasizes the importance of selecting qualified legal counsel with a successful track record in securities class actions [4]

Core Viewpoint - AppLovin (APP) has experienced significant stock volatility recently, dropping 36% from its all-time high of $525, but positive earnings revisions suggest potential for recovery as market conditions stabilize [2][3]. Financial Performance - AppLovin's fiscal 2025 EPS estimates have increased by 16% in the last 60 days, rising from $5.89 to $6.87, and FY26 EPS estimates have surged nearly 29%, from $7.31 to $9.42 [4]. - The company beat Q4 EPS expectations for FY24 by 29.1%, indicating strong financial performance [4]. Earnings Estimates - The trend of earnings estimate revisions shows significant increases: Q1 estimates rose by 11.54%, Q2 by 12.23%, FY25 by 16.64%, and FY26 by 28.86% [5]. Valuation Metrics - AppLovin's current forward P/E ratio is 48.2X, which is more reasonable compared to its one-year high of 98.9X and closer to its 12-month median of 29.6X [6]. - The stock is viewed as a potential "buy the dip" opportunity due to the leveling of its P/E valuation, which is encouraging for long-term investors [8]. Market Outlook - The company is expected to achieve double-digit sales growth in FY25 and FY26, enhancing its investment appeal despite recent market volatility [7]. - AppLovin has received a Zacks Rank 1 (Strong Buy) rating, reflecting the positive trend in EPS revisions [7].

Business Strategy and Operations - The company announced the sale of its mobile gaming business for a total consideration of $900.0 million, comprising $400.0 million in shares and $500.0 million in cash[34]. - The company is expanding its advertising ecosystem with new products such as AdPool, TVBits, BrandDiscovery, ContentDiscovery, and Global FAST Pass (GFP) to enhance monetization and audience engagement[35]. - The company aims to optimize its advertising solutions to capture growth in the existing mobile app segment and expand into non-gaming mobile app segments, including e-commerce and social media[36]. - The company plans to pursue strategic investments and partnerships to accelerate growth, leveraging its reputation as a partner of choice in the industry[36]. - The company is expanding its offerings into new business opportunities, including e-commerce and connected TV markets, which may require significant investment and could face challenges[103]. - The company has made significant acquisitions, including Adjust, MoPub, and Wurl, and intends to pursue further strategic acquisitions to diversify operations[111]. - The company is facing cybersecurity risks and potential misuse of user data, which could adversely affect user trust and engagement, harm brand reputation, and lead to financial liabilities[72]. - The company has reduced user acquisition spending to improve Adjusted EBITDA margins, but this has also led to a decline in Apps Revenue and Monthly Active Payers[122]. - The company is subject to various laws and regulations regarding privacy and data protection, which may increase compliance costs as it expands its advertising solutions[49]. Financial Performance and Risks - The company anticipates that revenue from its advertising solutions may experience seasonality, particularly in the fourth quarter due to holiday demand[40]. - The company's results of operations are likely to fluctuate significantly from quarter-to-quarter and year-to-year due to various unpredictable factors[62]. - The reliance on third-party platforms for distributing AppLovin Apps and collecting revenue poses a risk to the company's financial stability[62]. - The company faces challenges in maintaining and growing its client and user bases, which could impact revenue generation[62]. - There is a high degree of risk associated with the company's ability to launch or acquire new Apps and successfully monetize them[62]. - The company has substantial indebtedness, which may affect its ability to generate sufficient cash flow to meet debt obligations[62]. - The company’s revenue is concentrated in the mobile app ecosystem, and any failure to diversify revenue sources could adversely affect its financial condition[102]. - The company’s ability to generate sufficient cash flow to meet its debt service obligations is uncertain, which could adversely impact its financial condition[199]. - The company may require additional capital for business growth, which may not be available on acceptable terms[201]. Regulatory and Compliance Challenges - The company must navigate changes in laws and regulations concerning privacy, data protection, and advertising, which could affect its business model[62]. - The company is subject to potential liability related to children's privacy, which could adversely affect its financial condition and operations[152]. - The implementation of new data privacy frameworks, such as the EU-U.S. Data Privacy Framework, may impact cross-border data transfers and compliance costs[149]. - The company is subject to evolving U.S. and foreign laws that could adversely affect its business and financial condition[155]. - The company anticipates increased scrutiny and regulation in the online gaming sector, particularly regarding loot boxes, which could impact user engagement and monetization[156]. - The company may face increased regulatory and compliance risks as it expands its operations globally, which could affect its financial condition[120]. - The company is subject to risks associated with international operations, including compliance with foreign laws and potential political and economic instability[116]. Market and Competitive Landscape - The company faces significant competition in the advertising ecosystem and mobile gaming, with competitors including Facebook, Google, Amazon, and Unity Software, which could adversely affect its business and financial condition[89]. - The company may face increased competition from new entrants in the mobile app market due to low barriers to entry, impacting user acquisition costs and engagement[91]. - The company derives a significant portion of its revenue from a limited number of third-party distribution platforms, such as the Apple App Store and Google Play Store, creating concentration risk[102]. - The company experienced a decline in advertising revenue due to macroeconomic deterioration, with advertisers managing budgets more closely in 2022[105]. Technology and Innovation - The company continues to invest in AI technologies, particularly its AXON advertising engine, to improve advertising efficacy and meet evolving customer needs[41]. - The company relies on its AI-powered advertising engine AXON to improve advertising effectiveness, which is critical for future growth[94]. - The introduction of AI technologies, including the new AI-powered advertising engine AXON, requires significant investment and may face regulatory scrutiny[159]. - The development and use of AI technologies in the company's offerings may introduce additional cybersecurity risks[71]. Corporate Governance and Shareholder Matters - The company is considered a "controlled company" under Nasdaq corporate governance requirements, allowing exemptions from certain governance requirements[206]. - The multi-class stock structure and Voting Agreement may delay or prevent a change in control, potentially affecting the market price of Class A common stock[220]. - The board of directors authorized an increase to the share repurchase program of up to $2.0 billion, with $2.3 billion of Class A common stock available for repurchase as of December 31, 2024[214]. - The company may issue up to 1,500,000,000 shares of Class A common stock, which could dilute existing stockholders[217]. Financial Position and Capital Structure - As of December 31, 2024, the company had a total of $3.6 billion in aggregate principal amount of senior unsecured notes outstanding[196]. - The company also had $1.0 billion of commitments under its senior unsecured credit agreement, with no outstanding loans as of December 31, 2024[196]. - A ratings downgrade from credit rating agencies could adversely affect the company’s ability to access debt markets and increase borrowing costs[198]. - The market price of Class A common stock has been volatile, influenced by factors such as economic uncertainty and market sentiment[210].

Core Insights - The article discusses the recent developments regarding AppLovin Corporation and highlights the importance of timely analysis in investment decisions [1]. Group 1: Company Overview - AppLovin Corporation is mentioned as a focal point for investment analysis, indicating its relevance in the current market landscape [1]. Group 2: Analyst Insights - Daniel Sereda, a chief investment analyst, emphasizes the need to filter vast amounts of information to identify critical investment ideas, showcasing the analytical approach taken towards AppLovin [1]. - The article suggests that there may be a potential for initiating a long position in AppLovin stock or related derivatives within a short timeframe, indicating a bullish outlook [1].