The AppLovin logo arranged on a smartphone in New York, US, on Wednesday, Feb. 26, 2025.
Gabby Jones | Bloomberg | Getty Images
AppLovin shares plummeted on Monday after Bloomberg reported that the SEC has been probing the mobile advertising company over its data-collection practices.
The agency has been looking into whether the company violated agreements on pushing targeted ads to consumers, Bloomberg reported, citing people familiar with the matter. The report said that the SEC is responding to a whistleblower complained filed this year along with multiple short-seller reports, and added that neither the company nor its officials have been accused of wrongdoing.
An AppLovin spokesperson said the company doesn’t typically comment on the “existence or non-existence” of regulatory matters.
“That said, as a global public company, we regularly engage with regulators and if we get inquiries we address them in the ordinary course,” the spokesperson said in a statement. “Material developments, if any, would be disclosed through the appropriate public channels.”
AppLovin’s stock has been on a tear, jumping about 80% this year after soaring more than 700% in 2024. The surge has been driven by the company’s artificial intelligence technology that’s allowed it to provide better ad targeting capabilities to brands.
Last month, AppLovin was added to the S&P 500, replacing MarketAxess Holdings, at the same time that Robinhood joined the index in place of Caesars Entertainment.
AppLovin made the move into the benchmark despite a short-seller’s effort to keep it out.
In March, Fuzzy Panda Research advised the committee for the large-cap U.S. index to keep AppLovin from becoming a constituent. AppLovin shares dropped 15% in December, when the committee picked Workday to join the S&P 500.
Three notable short-seller firms, including Fuzzy Panda, have slammed AppLovin of late. The latest was Muddy Waters Research, which in March said the company’s ad tactics “systematically” violate app stores’ terms of service by “impermissibly extracting proprietary IDs from Meta, Snap, TikTok, Reddit, Google, and others.” In so doing, AppLovin is funneling targeted ads to users without their consent, Muddy Waters said.
Fuzzy Panda and Culper Research put out reports the prior month, taking aim at AppLovin’s AXON software, which drove its earnings growth and stock surge. The shares dropped 12% on Feb. 26, the day of the short reports.
After those reports were published, AppLovin CEO Adam Foroughi wrote a blog post, defending his company’s technology and practices, and taking aim at the short sellers trying to profit from AppLovin’s decline.
