AppLovin recovers ground; analysts push back on short report

Shares of marketing platform AppLovin APP.O rise 4.3% to $272.98

Stock slumped over 20% in the prior session after Muddy Waters Research disclosed short position

Muddy Waters is latest to short APP after Fuzzy Panda Research and Culper Research revealed short positions in February

Analysts at Loop Capital and Wells Fargo dispute Muddy Waters' claims

Wells Fargo's Alec Brondolo says APP's e-commerce incrementality is strong at between 55% and 60% new customers, versus Muddy Waters' claim of a more than 50% retargeting mix

Loop Capital says short report's claims of faulty conversions and fraud "easily disproved" by analysts' discussions with performance marketers and measurement companies

"We would be aggressive buyers on weakness ahead of a major expansion cycle now underway... AppLovin remains our top pick for the year" - Loop Capital

Loop Capital reiterates "buy" rating and $650 price target on APP, while Wells Fargo maintains "overweight" rating and $538 price target

Short interest in stock at 3.8% of public float, according to data compiled by LSEG

APP says it has retained law firm to investigate recent short seller activity

Twenty of 26 brokerages rate APP "buy" or higher; the median PT is $550

APP has dropped 15.7% YTD