Why AppLovin Stock Cratered on Tuesday

AppLovin submitted a "compelling non-binding proposal" to combine with video game engine Unity Software (NYSE: U). Under the terms of the proposed all-stock deal, each outstanding share of Unity stock would be exchanged for 1.152 shares of AppLovin Class A voting stock and 0.314 shares of AppLovin Class C non-voting stock. This would result in Unity shareholders receiving 55% of the outstanding shares of the combined company, while AppLovin shareholders would control the remainder, though AppLovin would maintain 51% of the voting control.