Cheetah Mobile stock is soaring Wednesday as it recovers from a major decline from a report made on Tuesday.
The big drop to Cheetah Mobile (NYSE:CMCM) stock came after a report from BuzzFeed claimed that the company was taking part in an ad fraud scheme. This claim argues that seven of the company’s eight apps exploit user permissions to gain ad revenue from other apps. This is called click injection.
Cheetah Mobile initially stated that it would check with software development kit (SDK) providers about the issue. However, BuzzFeed argues that the company owns these SDKs. The click injection claims come from app analytics group Kochava.
Cheetah Mobile is pushing back against the claims being made in the BuzzFeed article. The company says that it is pursuing legal action against Kochava and the person that has “generated and disseminated,” the claims that it calls “untrue and misleading.”
All of the drama surrounding CMCM on Tuesday sent the company’s stock down 33% when the markets closed. This includes a selloff of Cheetah Mobile stock that was partially responsible for the decline.
Cheetah Mobile stock is starting to recover today. The stock was up 23% as of noon Wednesday. This doesn’t quite make up for all that was lost yesterday, but it is a path toward recovery. It is also worth noting that CMCM stock is down 54% since the start of the year.
As of this writing, William White did not hold a position in any of the aforementioned securities.