The U.S. Securities and Exchange Commission is investigating marketing platform AppLovin’s data-collection practices, according to Bloomberg News. The probe follows a whistleblower complaint and multiple short seller reports alleging the company violated service agreements to push targeted ads.
Shares of AppLovin fell 14% by market close. SEC enforcement teams focused on cyber and emerging technologies are handling the case. The regulator has not accused the company of wrongdoing, and it’s unclear how far along the review is.
Short Sellers Raise Serious Allegations
Earlier this year, three short sellers targeted AppLovin. Fuzzy Panda Research claimed the company stole data from Meta. Culper Research accused it of exploiting app permissions to install apps silently on users’ phones. Muddy Waters Research alleged AppLovin collected and structured user IDs from partners in violation of their terms of service, though some analysts later disputed those claims.
Company Response and Recent Moves
AppLovin has hired Quinn Emanuel to investigate the short seller activity and declined to comment on regulatory matters. The SEC, meanwhile, cited the government shutdown as the reason it cannot respond to media inquiries.
In April, AppLovin made a bid for TikTok’s assets outside China and later sold its mobile games studio to London’s Tripledot Studios for $800 million in a cash-and-stock deal.
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