AppLovin CEO explains why his proposal for TikTok is better than rival bids

AppLovin Corp (NASDAQ: APP) chief executive Adam Foroughi says the ad-tech company’s proposal to acquire TikTok is significantly stronger than the competing bids.

While others are primarily interested in TikTok US only, AppLovin is eyeing a merger with global operations of the social platform, which effectively makes it a “partnership” that stands to benefit Chinese as well.

Foroughi’s remarks arrive shortly after President Trump offered another 75 days to ByteDance to unload its US operations.

TikTok will remain operational in the United States through the extended deadline.

Amidst tariffs driven sell-off and short-seller allegations, AppLovin stock has lost more than 50% since mid-February. 

AppLovin deal could boost ad dollars spent on TikTok

CEO Adam Foroughi also touted President Trump as a “great dealmaker” in an interview with CNBC, adding what AppLovin is proposing is essentially a “bigger version of all the deals contemplated.”

The Nasdaq-listed firm has an algorithm that, if combined with TikTok’s audience, could trigger an exceptional increase in the ad dollars spent on the social platform.

Other US entities interested in buying TikTok US include cloud giant Oracle, retail behemoth Amazon, billionaire Frank McCourt, and a bunch of private equity companies.

Note that APP is pushing to takeover TikTok at a time when it’s already wrestling with allegations of dubious practices from Muddy Waters and claims of ad fraud from Fuzzy Panda Research.

AppLovin’s financials remain strong

AppLovin stock has crashed in recent months even though the ad-tech company reported earnings for its fourth financial quarter that handily topped Street estimates in February.

APP earned $1.73 a share in its latest reported quarter on $1.37 billion in revenue – well ahead of $1.24 a share and $1.26 billion that experts had forecast.

More importantly, the Nasdaq listed firm guided for $1.36 billion to $1.39 billion in revenue for Q1 at the time, also ahead of analysts’ expectations of $1.32 billion.

AppLovin stock does not, however, pay a dividend at the time of writing.

Should you invest in AppLovin stock in April?

While AppLovin shares have tanked significantly amidst myriad of headwinds in recent months, Wall Street remains bullish at large on APP.

Earlier this week, Citi reiterated its “buy” rating on the mobile technology firm.

The firm currently has a $600 price target on AppLovin stock that indicates potential for a more than 170% upside from current levels.

In it research note, the investment firm agreed that buying TikTok, even just the social platform’s US assets, could prove significantly beneficial for the Nasdaq listed firm in the long run.

However, Citi also warned that the possibility of an AppLovin-TikTok deal was “far below 1%”.

Note that the ongoing sell-off has made AppLovin stock give back all of its post US elections 2024 gains.

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