AppLovin ‘misappropriates user data,’ Muddy Waters says in short report

Muddy Waters Research disclosed that the firm is short AppLovin (APP). “Web traffic analysis leads us to estimate that ~52% of APPs e-commerce conversions are retargeting and incrementality is only ~25%-35%. Code evidences that APP is collecting and structuring user IDs from its key platform partners, which appears to be a major violation of the platforms’ terms of service. APP therefore, in our opinion, could be deplatformed, similar to Cheetah Mobile. If APP is not deplatformed, logically, numerous competitors will start copying APP’s techniques because there is little technology involved. APP’s advertising clients are likely sensitive to actual incrementality, which should frustrate APP’s growth plans. We have already observed e-commerce client churn of ~23% in Q1,” the firm stated on its site.