Why AppLovin Stock Dropped 11.9% Last Month
It was an unusual up-and-down ride for shareholders of app monetization company AppLovin (NASDAQ: APP) last month. Midway through February, AppLovin stock was up by as much as 38%. But it then plunged by 36% from that peak to close out the month down 11.9%, according to data provided by S&P Global Market Intelligence.AppLovin stock was riding high after the company reported its fourth-quarter results on Feb. 12. In Q4, the company grew its revenue by 44% year over year to $1.37 billion, which was an acceleration from its 39% growth in the third quarter and also around $100 million higher than analysts expected. Management was upbeat about the pace of adoption of its software, and this excited investors.However, Wall Street's exuberance quickly gave way to alarm as multiple short sellers -- among them The Bear Cave, Fuzzy Panda Research, and Culper Research -- published critical reports on AppLovin. Short sellers profit when a stock goes down, and it's common for short firms to publish extensive research papers explaining their reasons for thinking that one is overpriced. Continue reading
It was an unusual up-and-down ride for shareholders of app monetization company AppLovin (NASDAQ: APP) last month. Midway through February, AppLovin stock was up by as much as 38%. But it then plunged by 36% from that peak to close out the month down 11.9%, according to data provided by S&P Global Market Intelligence.
AppLovin stock was riding high after the company reported its fourth-quarter results on Feb. 12. In Q4, the company grew its revenue by 44% year over year to $1.37 billion, which was an acceleration from its 39% growth in the third quarter and also around $100 million higher than analysts expected. Management was upbeat about the pace of adoption of its software, and this excited investors.
However, Wall Street's exuberance quickly gave way to alarm as multiple short sellers -- among them The Bear Cave, Fuzzy Panda Research, and Culper Research -- published critical reports on AppLovin. Short sellers profit when a stock goes down, and it's common for short firms to publish extensive research papers explaining their reasons for thinking that one is overpriced.
