AppLovin Corp.(APP) Drops 10.9% W/W on Misrepresentation Claims

AppLovin Corp. (NASDAQ:APP) is one of the Massive Sell-Offs: These 10 Stocks Shockingly Nosedived.

AppLovin dropped its share prices by 10.9 percent week-on-week, ending last Friday at $324.7 versus the $364.49 close on June 13, as investor sentiment was largely dented by Culper Research’s report that it was short on its stock over fears of national security risks due to misrepresentations on its Chinese operations.

In a market report last week, Culper Research claimed that AppLovin Corp. (NASDAQ:APP) “blatantly misrepresented the scope of both its Chinese shareholders and its Chinese operations, posing not only risks to shareholders, but national security.”

According to the investment firm, it believed AppLovin Corp. (NASDAQ:APP) was backed by Chinese national Hao Tang through a variety of offshore shell companies, owning as much as 9.8 percent of Class A shares.

AppLovin Corp. (NASDAQ:APP) repeatedly denied claims of Chinese ownership and ties to China.

Further adding to the sour sentiment was its non-inclusion in the recent S&P 500 index rebalancing, after two other investment firms expressed confidence earlier that it would join the index for meeting the criteria of $20.5 billion in market value and GAAP profitability over the past four quarters.

A close-up of a mobile device, showing an advertiser reaching out to a consumer via a software-based platform.

Getting included in the S&P 500 can be advantageous to stock components as it exposes them to a wider group of investors.

While we acknowledge the potential of APP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.