AppLovin rebounds as Citi says tumble on report of SEC probe is a buying opportunity

AppLovin got thwacked late in the session on Monday following a report by Bloomberg that the SEC is investigating the ad tech company’s data collection practices.

Shares are paring some of that decline on Tuesday, up about 3% in early trading. Citi analyst Jason Bazinet calls yesterday's late tumble “a bit extreme,” as he estimates it’s equivalent to pricing in a $680 million hit to revenues.

“We would be buyers on any weakness,” he wrote.

Bazinet, who has a “buy” rating and $850 price target on AppLovin — the highest among all analysts polled by Bloomberg — suggested the company’s response to the report implies it may not be that serious of an issue, in management’s eyes. AppLovin told Bloomberg that it would disclose material developments through appropriate public channels.

“We view the lack of an 8K filing as a positive in that the firm does not view this probe as a ‘material’ risk,” he wrote. “In addition, we would suspect Apple and Google would properly monitor their respective platforms and enforce any potential violations.”