If you are wondering why APP is taking a brutal beating today, it’s due to the fact that several legal firms are assembling class action suits against the company which appear to be based on the recent short report.
I have a lot of confidence in the company and the management and it could be that these actions don’t actually result in legal action. In that there are several different law firms attempting to gather plaintives, it will be some time until it all gets consolidated to one suit under one firm.
So it’s either a great time to load up or it’s headed to the dumpster. Will Foroughi come out with a statement soon to allay investor fears? We’ll see.
Foroughi already did. Hard to allay anything though in an extreme fear environment. Still lots of profits to be booked by older holders if they’re interested in taking them.
I should have asked if Foroughi will come out with a new statement in an attempt to allay investor fears. Though I’m not sure it would do any good. As @stocknovice noted, the level of fear in the market is, if not unprecedented, at least very high. Maybe there’s nothing more he can say - - - Although I personally believe he could be more specific than he was with his previous statement.
But I will emphasize that attempts to generate a class action suit does not always result in one. It was not too long ago that Sentinel One outright admitted to improper statement of ARR which clobbered the stock. Several legal offices opened class actions and solicited aggrieved investors. Nothing came of it so far as I know.
That’s where things stand at present. I think it safe to assume that AppLovin will defend itself, but maybe they don’t feel like there’s much more than can say to investors right now.
Here is the lead from one article. They seem to be saying here the problem is that,
customers expected more efficiency
customers thought the original platform would automatically expand to selling into the e-commerce pilot
The case presented against them seems to have basic misunderstandings about the core products. It is even hard to read some of these articles and short report because of the lack of product understanding and unclear allegations.
I sold half my Service Now to buy a bunch of Applovin today. Thanks for all the great work here.
That’s not to say I’m sure there’s nothing to the allegations; but, clearly I’m in agreement with those on this and the prior Applovin thread, so far.
In a recent post, I noted my focus on and the importance I place on CEO character. I’ve listened to several CC’s and read much about this c-suite. For what’s it’s worth, they all pass the smell test like I can’t get enough.
I agree with you. Ive held APP as my largest holding for over a year now. Its no longer my largest holding due to trimming a bit and the recent drops, but I’m happy to contine holding. I’ve been very impressed with Adam and the company over the past 12 months and it feels a very solid company, even though its clearly going through the mill right now with one thing after another.
This market feels brutal. When everything I own is dropping by huge amounts day after day it is hard to know what to sell and what to buy when I still believe in the companies themselves. So the best thing to do is hunker down and wait till the fear is gone and buying returns in the market again.
UBS analyst also out defending APP, maintains buy rating and $630 pt
Wedbush notes that AppLovin has been “blasted by a series of short reports” this morning, but the firm thinks the reports are “misguided” and argues that if AppLovin is, in fact, committing fraud, the firm finds it “highly unlikely that it has yet to face a legal challenge from former employees, Facebook, advertisers or competitors.” The firm also finds it “inconceivable that no regulators, attorney generals nor legal authorities have yet begun an investigation,” while noting that the company’s financial reports are audited and the auditors have not raised any fraud issues. Wedbush maintains an Outperform rating and $620 price target on AppLovin shares.
AppLovin Corporation’s financial statements are audited by Deloitte & Touche LLP, a prominent global accounting firm. This is confirmed through AppLovin’s SEC filings, specifically the Form 10-K annual report, where Deloitte & Touche LLP is listed as the independent registered public accounting firm responsible for auditing the company’s consolidated financial statements. For example, in the 2023 Form 10-K filed on February 27, 2024, Deloitte provided an unqualified opinion on AppLovin’s financials for the fiscal year ended December 31, 2023, indicating that the statements fairly represented the company’s financial position in accordance with U.S. GAAP (Generally Accepted Accounting Principles).
Deloitte has been AppLovin’s auditor for recent years, as evidenced by their consistent role in signing off on the company’s annual reports since its IPO in 2021. There’s no indication of a change in auditors as of the latest filings available up to March 7, 2025.
IMO, nothing has changed since 2/26/25, when Wedbush and other investment houses had similarly reaffirmed their price targets, except now 6 law firms are asking for shareholders to join class actions (the average after a share price change like this is what 4-8)
Please excuse my language, but I find these arguments utter trash. This is relying on the person before to do their due diligence. This is why Enron, Madoff and even Theranos scams went on for as long as they did. Everyone invested in Theranos thought, oh wait, this private equity is invested and they must’ve done their due diligence. I don’t know if the short report is real or not. I’m just saying the arguments made by Wedbush lack substance.
Well, maybe. However I think it’s more than likely that Deloitte learned a lesson from Arthur Andersen - you know, the Enron auditor that is no more. And quite frankly none of the businesses that you mentioned were in a position even close to the position that FB supposedly occupies.
Maybe you’ve got a point, but IMO it’s a kind of a dull point as the situations of Enron, Madoff and Tharanos were very dissimilar to the situation of AppLovin. Not that you can’t be correct, just not for the reasons you suggested.
From my perspective this is more similar to the numerous class action suits that were initiated against Sentinel One after they disclosed that they had been misreporting ARR. I actually thought there was a solid basis for that legal action, but nothing came of it.
So that brings us to the legal accusations. I have not read the allegations, I’ve only read a rather abbreviated summary. To me, the charges appear to be drawn directly from the Fuzzy Panda short report along with another specious short report that I noted on this board last January and probably the Culper short report as well, thou I haven’t read that one.
While I hasten to add that I am far from an expert in these matters my assessment of the short reports which I have read was that there were a lot of unsupported claims. And several claims that even if true didn’t rise to the level of illegal activity (at least I don’t think illegal).
In the end, I don’t imagine that it will take very long before we have a better understanding of whether or not there is substantiative claims.
I’ll just add that I included this assessment, not because of who provided it -In this case Wedbush; but, because I happened to agree with bolded parts of it. I wasn’t making an argument as much as pointing out that there has been nothing new added and yet we saw an 18% drop why? Because some law firms, who average near 350 similar types of class action suits in the past, piled onto what I view was FUD following a couple of short reports.
My intention when writing the post was to point to what I believed to be some reasonable points as to who might better sway my opinion. I suppose I could have left off the added context. If so, is anyone here disagreeing with this assessment, please write a post. I’m here to learn from others.
