While every Wall Street Dick and Jane spent most of yesterday horned up over the big swingin’ numbers Obi Huang Kenobi was about to release (read: Nvidia), AppLovin, got absolutely rekt. Shares tanked 12% after a couple of wannabe Hindenburg short-sellers decided to drag its name through the mud. And by “drag through the mud,” I mean accuse the company of straight-up ad fraud, data theft, and violating Apple and Google’s app store policies.

(Source: Giphy) 

In short, Fuzzy Panda and Culper Research—two firms that specialize in setting stocks on fire for a living—dropped reports claiming AppLovin’s AXON ad software is basically a glorified scam machine. According to them, the AI-powered system that turned AppLovin into one of 2024’s hottest stocks isn’t just good at selling ads—it’s good at stealing data from Meta, forcing shady app installs, and exploiting consumers in ways that bring back flashbacks of Big Zucks prime Facebook days. 

Additionally, just for good measure, these two vigilante short firms also suggested that if Apple and Google ever decide to wake up, they might just nuke AppLovin’s entire business model by banning its SDKs from their app stores. Translation: Imagine pouring your life savings into a stock that gets yeeted into oblivion because Tim Cook finally decides to read the terms of service LOL.

(Source: CNBC) 

The moral of the story is Wall Street was in love—until it wasn’t. Up until yesterday, AppLovin was the golden child of 2024, with shares up over 700% and investors foaming at the mouth over its AI-driven ad revenue. The company’s latest earnings were a massive beat, with ad revenue surging 73% to nearly $1 billion, and CEO Adam Foroughi was hyping up the expansion of its AXON model into e-commerce, healthcare, and automotive like he was selling the second coming of Google Ads and “Pixels”. 

However, Fuzzy Panda proclaimed that AppLovin is in fact, really just a “House of Cards” waiting to collapse in spectacular fashion . Foroughi, clearly pissed off that his stock was getting obliterated, clapped back—calling the short reports “false and misleading” and accusing the firms of trying to tank the stock for their own profit. Which, to be fair, is literally the entire business model of short sellers, so no arguments there—he definitely has a point.

(Source: Giphy) 

What’s more is that his main defense also claims that the reports were "littered with inaccuracies" and conveniently dropped during a time when AppLovin couldn’t publicly respond due to earnings restrictions. Meaning Foroughi, basically let everyone know that “these guys are full of sh*t, and the timing of this is sus, but we can’t tell you why just yet”. Reassuring, to say the least.

So with that, where does that leave us? Well as of right now, the market is trying to figure out if AXON is actually a game-changing AI ad platform—or just a really sophisticated way to commit ad fraud at scale. If Apple, Google, or Meta decide to actually investigate the allegations, this could get ugly fast. For now, AppLovin investors have two choices: pray the company isn’t the next ad-tech Ponzi scheme, or accept that their portfolio just became a meme.

(Source: Giphy) 

In the meantime though, the story ain’t over yet, so keep your eyes on AppLovin to see how they defend this. Regardless, either this situation is the beginning of the end, or it’s just a really good degenerate “BTFD” opportunity. Either way, do your due diligence and don’t be dumb whichever decision you make. As always, stay safe and stay frosty, friends! Until next time…

 P.S. My buddy Jared is sharp as hell—probably one of the smartest guys I know. But when it comes to investing? An absolute clown. Why? Because he doesn’t grasp the one thing that separates winners from losers in the market: information. And not just any information—I’m talking about the kind of intel that Wall Street hoards like the FBI hoards Hunter Biden's laptop—because the second retail traders get their hands on it, their edge starts to disappear.

Moral of the story here? Don’t be a Jared. Get access to the real market-moving data, the stuff hidden behind paywalls and institutional gatekeeping by joining Stocks.News premium. At the end of the day, the market isn’t playing fair—so why should you? 

Stocks.News holds positions in Apple, Google, and Meta as mentioned in the article.