AppLovin - History P2

Don't have a lot of time today so this will be a shorter one, going to dive a bit into the company's funding history and equity make-up, as the analysis of the core business strategy will need to be more in-depth.

History

1. Who founded the company
   1. has management changed significantly over time
   2. how credible is current vs previous management
   3. is this a significant factor in the price of the equity i.e. will this affect growth / the multiple that the market is willing to pay
2. What is their business strategy and how has it evolved?
   1. What has and hasn't worked in the past, and why?
3. What's the company's funding history and equity makeup?

Section 3: AL's funding history and current equity makeup

AL operated in stealth until 2014, with various sources contesting either a bootstrapped approach or undisclosed seed funding from Streamline Ventures.

2014: $4m From angel investors (John Burbank, Eduardo Vivas), the Webb Investment Network (VC), and Streamlined Ventures (VC).

Sept 26, 2016: Agreed to be acquired by Chinese PE firm Orient Hontai Capital for 1.42B, but was blocked by CFIUS.

Jan 01, 2017: Receives 140M of Series C funding from Orient Capital.

Nov 22, 2017: Receives 981M of conventional debt funding from Orient Capital.

July 2018: KKR acquires a minority stake for 400M

Aug 2018: Convertible debt note from Hontai fully refinanced to credit facilities from US-based investors, Hontai retains a small equity stake of 1.18B.

There's also a whole host of acquisitions by AL, which I will include in the next post.

Equity Breakdown:
31.39% of shares held by insiders (Top 3 Adam Foroughi, John Krystynak, Eduardo Vivas (11.44% together))
56.94% of shares held by instos (incl GQG, Vanguard, Blackrock, WCM, SVB, and interestingly - Netease)
82.99% of float held by instos -

Interestingly, if you look at Marketscanner (not sure how legit this website is) it suggests Tang Hao and Ling Tang as two major shareholders, having almost a 16% combined stake.
(I have no clue who these people are, but will do some digging to find out).

Insiders have sold a net 5.3% of shares over the last 6 months.

Some further questions:
who tf are Tang Hao and Ling Tang? Are they real people and is Marketscanner reliable?
who owns the remainder of the 20% of insider stock?
What has their acquisition history looked like, and how have those worked out thus far?
How sensitive are the regulators to the potential Chinese ownership amidst the current political climate?
What is the nature of the investment from the institutions?
How does the level of institutional ownership compare to the rest of the market and comparable companies?
what do the short/long options volumes look like and how will they affect viability?


Conclusion - Shares are mostly owned by isntos, which should imply lower random volatility and the existence of more block trades. However, bad news could lead to larger swings in share price as instos are forced to cover their positions or take stop loss measures.
(or it may actually have the opposite effect, as it would take instos a longer amount of time to exit their positions without significantly affecting the market, but I'm not sure.)


Price at time of writing:
$83.44

Sources:

https://tracxn.com/d/companies/applovin/__usaOUXLPLxPWVgpRfUtewdq3ATJorsO_p5KbNwllinU/funding-and-investors#:~:text=How%20much%20funding%20has%20Applovin,%241.72B%20over%206%20rounds

https://www.reuters.com/article/us-applovin-m-a-hontaicapital-exclusive/exclusive-applovin-tweaks-chinese-takeover-deal-after-u-s-pushback-idUSKBN1DL2N3

https://finance.yahoo.com/quote/APP/holders

https://www.marketscreener.com/quote/stock/APPLOVIN-CORPORATION-121407289/company/

(and I'm ashamed to admit it, but it is useful:
https://en.wikipedia.org/wiki/AppLovin)