AppLovin lost $17 billion in value after allegations of fraud and collecting children's data
The companies Culper Research and Fuzzy Panda Research released scathing reports dedicated to AppLovin. They claimed that AppLovin significantly inflates advertising metrics and engages in unethical and even illegal practices.
Here are some of the accusations made by Culper Research and Fuzzy Panda Research:
- AppLovin “steals” Meta* data to enhance the effectiveness of its advertising tools;
- AppLovin uses manipulative tactics in app advertising. For instance, when users click on close or skip buttons in ads, they are redirected to the App Store. Moreover, ads are programmed to automatically click on the link to forcibly redirect to the store;
- AppLovin inflates CTR (Click-Through Rate). The company’s rate averages 30-40%, which is ten times higher than the industry standard;
- AppLovin unlawfully tracks children’s data. Sometimes ads with sexual content are shown to children.
As Bloomberg noted, shortly after the accusations surfaced, AppLovin's stock price dropped by 23%. This was the largest one-day decline in the company's history. By the market close on February 26, they managed to recover slightly, with final daily losses at 12%. As a result, AppLovin’s market value decreased by $17 billion, now standing at $111 billion.
AppLovin has already responded to the accusations. The company’s CEO, Adam Foroughi, called them lies. In his opinion, Culper Research and Fuzzy Panda Research released their reports to profit from the stock’s collapse.
*Meta is recognized as an extremist organization in Russia, and its activities are banned in the country.