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AppLovin Stock takes a hit in June

AppLovin Stock takes a hit in June
AppLovin Stock takes a hit in June

Investors penalized AppLovin (NASDAQ: APP) last month for its failures rather than its actions. A harsh short-seller report further harmed sentiment, and the company lost out on a possible boost from joining a major stock index. AppLovin’s stock only fell about 11% in June, which could have been worse, in spite of these setbacks.

AppLovin Stock takes a hit in June

The operator of the widely followed S&P 500, S&P Dow Jones Indices, was getting ready to rebalance its index at the beginning of June. Based on eligibility, it adds and removes businesses every three months. Bank of America analysts conjectured about potential additions, naming AppLovin as one of seven contenders, with Robinhood Markets at the top of the list.

The market was taken aback by the index provider’s complete lack of change, though. This decision shattered investor expectations and dashed hopes for AppLovin’s inclusion. Although the market may have dismissed that setback, it was unable to overlook the subsequent events.

In mid-June, the short-selling company Culper Research published a scathingly critical 30-page report on AppLovin, focusing heavily on the company’s interest in purchasing the non-Chinese operations of TikTok, the contentious video-sharing website under investigation by the U.S. government.

Culper claims that Hao Tang, who holds a significant amount of the company, has “extensive direct and indirect ties” to the Chinese government and a “shady past.” Culper went on the claim that this is a case of “covert Chinese ownership” and claims that it is a serious national security threat.

Silence from the company

The Culper report has not yet received an official response from AppLovin. The business might think the controversy will go away, but it could cost them money if they remain silent.

Experts on the topic believe this is a mistake. Concerning claims like the one the short-seller makes have a tendency to stick around and lower investor morale. Time will tell if the business can provide news that is sufficiently positive to erase the many charges from the collective memory of investors.

Featured Image Credit: Artem Podrez: Pexels: Thank You!

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Matt Rowe is graduated from Brigham Young University in Marketing. Matt grew up in the heart of Silicon Valley and developed a deep love for technology and finance. He started working in marketing at just 15 years old, and has worked for multiple enterprises and startups. Matt is published in multiple sites, such as Entreprenuer.com and Calendar.com. Pitch Financial News Articles here: [email protected]
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