On March 27, 2025, Muddy Waters Research became the third short-selling firm to publish a report against AppLovin, alleging systematic violations of app stores' terms of service. The report claimed AppLovin's ad tactics 'impermissibly extract proprietary IDs' from platforms like Meta, Snap, TikTok, Reddit, and Google, funneling targeted ads without user consent.
Muddy Waters asserted that if AppLovin's practices are not deplatformed, numerous competitors could easily copy these techniques due to limited technology involvement. The firm also analyzed 776 e-commerce advertisers active early in the first quarter, reporting a churn rate of approximately 23%, contradicting CEO Adam Foroughi's reported claims of no churn.
These allegations echo previous reports from Fuzzy Panda Research and Culper Research, which also critiqued AppLovin's AXON software and its advertising practices. The accumulation of such reports from multiple short-sellers intensifies the scrutiny on AppLovin's business integrity and its AI-powered advertising technology.
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