AppLovin (APP) Under Pressure: Analyst Downgrades Follow Short Seller Barrage, Investor Lawsuit – Hagens Berman

/EIN News/ -- SAN FRANCISCO, April 18, 2025 (GLOBE NEWSWIRE) -- Just months after basking in the glow of a meteoric 700% stock surge, fueled by investor enthusiasm for its artificial intelligence technology and burgeoning ad business, AppLovin Corp. (NASDAQ: APP) is facing a shift in sentiment on Wall Street. Several prominent investment banks have significantly lowered their expectations for the stock following the release of multiple critical reports from short-selling firms about the mobile advertising technology firm.

Adding to its woes, AppLovin is now facing a securities class action lawsuit. Hagens Berman is investigating the alleged claims and urges investors who purchased AppLovin shares and suffered substantial losses to submit your losses now.

Class Period: May 10, 2023 – Feb. 25, 2025
Lead Plaintiff Deadline: May 5, 2025
Visit: www.hbsslaw.com/investor-fraud/app
Contact the Firm Now: APP@hbsslaw.com
    844-916-0895

Analysts Downgrade APP Shares

The latest blow came on Friday, April 11, when The Goldman Sachs Group slashed its price target for AppLovin from a lofty $500.00 to a more sobering $335.00. This downgrade followed a similar move by UBS Group earlier in the week, when the firm reduced its price target on AppLovin from $630.00 to $450.00.

Short Seller Onslaught: Allegations of Data Exploitation and Inflated Metrics

These downward revisions follow a barrage of critical reports from short sellers. Most recently, on March 28, Muddy Waters Research alleged that AppLovin's ad technology "systematically" violates app store rules by "impermissibly extracting proprietary IDs" from major platforms to deliver targeted ads without user consent. The report also claimed a significant churn rate among e-commerce advertisers, contradicting company statements.

Earlier, in February, Fuzzy Panda Research and Culper Research had also critiqued AppLovin's AXON software, with Fuzzy Panda later urging the S&P 500 committee to exclude the company due to alleged "data theft" and "revenue fraud."

Securities Class Action Alleges Misleading Statements

Adding to AppLovin's challenges, a securities class action lawsuit has been filed against the company. The lawsuit alleges that AppLovin misled investors about the capabilities of its enhanced AXON 2.0 digital ad platform and its "cutting-edge AI technologies."

Specifically, the lawsuit claims that AppLovin created a false impression that its technology would efficiently match advertisements to mobile games and expand into web-based marketing and e-commerce. However, the suit alleges that AppLovin was instead exploiting advertising data from Meta Platforms and using manipulative practices, including a "backdoor installation scheme," to force unwanted apps on customers. This allegedly inflated installation numbers and, consequently, the company's profit figures.

The class action lawsuit further points to the short seller reports released on February 26, 2025, which detailed AppLovin's alleged reverse engineering and exploitation of advertising data from Meta Platforms. These reports also claimed that AppLovin utilized manipulative practices to artificially inflate ad click-through and app download rates, such as self-clicking ads and employing design gimmicks to trigger forced shadow downloads. Following the release of these reports, the price of AppLovin shares reportedly fell by more than 12%.

Hagens Berman’s Investigation

Prominent shareholder rights firm Hagens Berman is investigating the claims.

“The allegations detailed in the short reports and outlined in the recently filed class action complaint, detailing the purported exploitation of user data and manipulative installation schemes, raise serious questions about the integrity of AppLovin's reported growth and the accuracy of its disclosures to the investing public,” said Reed Kathrein, the Hagens Berman Partner leading the firm's probe.

If you invested in AppLovin and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now »

If you’d like more information and answers to frequently asked questions about the AppLovin case and our investigation, read more »

Whistleblowers: Persons with non-public information regarding AppLovin should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email APP@hbsslaw.com.

About Hagens Berman
Hagens Berman is a global plaintiffs’ rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman’s team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw. 

Contact:
Reed Kathrein, 844-916-0895