AppLovin Corporation (APP) shares soared 7.99% in pre-market trading on Friday, staging a strong comeback after the stock experienced a record one-day drop of 20% on Thursday. The rebound comes in the wake of a short report issued by Muddy Waters Research, which had triggered a sell-off in the advertising technology company's shares.

The dramatic swing in AppLovin's stock price reflects the ongoing volatility surrounding the company, which has been a target of multiple short-seller reports in recent months. In February, Fuzzy Panda Research and Culper Research both published negative reports on AppLovin, following a cautionary piece by The Bear Cave. Despite these challenges, AppLovin had been one of the top-performing technology stocks in 2024, with gains exceeding 700% driven by the artificial intelligence frenzy.

CEO Adam Foroughi has previously defended the company against short-seller claims, stating in a blog post that it was "disappointing that a few nefarious short-sellers are making false and misleading claims aimed at undermining our success." The pre-market rally suggests that some investors view the recent pullback as a buying opportunity, despite the ongoing controversy. As AppLovin continues to navigate these challenges, market participants will be closely watching for any further developments or responses from the company to address the concerns raised by short-sellers.