To The Moon

Sept 13 (Reuters) - Shares of Unity Software Inc(U.N)fell 12% on Tuesday after AppLovin Corp(APP.O)withdrew its buyout offer for the gaming software maker, cementing Unity's planned purchase of ironSource LtdUnity had last month rejected a $17.54 billion all-stock bid from AppLovin that included the condition its $4.4 billion pursuit of Tel Aviv-based ironSource cannot go ahead.

AppLovin, whose services compete with ironSource in helping developers grow and monetize their apps, said late on Monday it would not table a higher bid and had pulled its initial offer.

Shares of AppLovin and ironSource were down 5% and 4%, respectively, amid broader market weakness after surprisingly strong inflation data.

An acquisition would have helped AppLovin build machine-learning capabilities using Unity's platform that has been used for games such as "Pokemon Go". AppLovin now plans to focus on fast-growing categories such as connected TV and offerings for manufacturers.

Analysts, however, expect AppLovin to face strong competition from Unity and ironSouce's merger deal alongside a weakening mobile ad market.

"Without AppLovin's further involvement, Unity's merger with ironSource is likely to close, creating a stronger competitor to AppLovin soon," said Oppenheimer analyst Martin Yang.