AppLovin CEO Adam Foroughi hit back at new short-selling allegations from Muddy Waters Research after the ad-tech company’s stock suffered its steepest drop on record on Thursday.

Foroughi penned a new blog post that asked investors to “dig deeper” on the allegations, saying the report’s claims about the success of their AI-powered ad tactics could be easily disproven by artificial intelligence models like Grok “in minutes.”

Muddy Waters on Thursday became the third short-selling firm to publish research meant to raise significant investor skepticism about the company’s technology, after AppLovin’s stock price soared more than 700% last year.

The report said AppLovin’s ad tactics “systematically” violate app stores’ terms of service by “impermissibly extracting proprietary IDs from Meta, Snap, TikTok, Reddit, Google, and others.” 

Foroughi wrote in his response that, “Our business is technical, and we get it — it’s not always easy to understand.”

“It’s also incredibly hard for some who don’t understand this technology to fathom that we are building the world’s best advertising AI model, so they need a simple narrative that we’re violating policies in order to comprehend our success,” Foroughi wrote. “This complexity leaves room for short reports to stir fear and doubt.”

AppLovin shares rose almost 4% on Friday after tumbling 20% a day earlier.

Prior to Muddy Waters’ report, Fuzzy Panda Research and Culper Research published short-seller research critiquing AppLovin’s technology as the company pushes into e-commerce.

AppLovin said on Friday that it retained Alex Spiro from law firm Quinn Emanuel to do “an independent review and investigation into recent short report activity targeting the Company.”

A spokesperson told CNBC that Spiro, who also represents Elon Musk, was hired to “investigate the short sellers as these tactics of spreading misinformation for personal gain cannot be allowed to continue unchecked.”

Analysts at Loop Capital reiterated their buy rating on AppLovin and $650 price target in a note on Friday.

“We think accusations of faulty conversions and fraud are easily disproved by speaking with performance marketers and measurement companies,” they wrote. “We have been very active on this front and are confident the platform is delivering excellent performance and driving meaningful revenue momentum.”

Muddy Waters Research did not yet provide additional comment.

WATCH: AppLovin shares drop on Muddy Waters short