AppLovin share price crashed over 14% on Monday following reports that the US Securities and Exchange Commission is investigating the company’s data-collection practices. AppLovin stock price ended 14.03% lower at $587.00 apiece on Nasdaq. In the extended trade, the stock declined 2.29%.
According to a Bloomberg News report citing people familiar with the matter, the US SEC is reviewing allegations that AppLovin violated service agreements with its platform partners to deliver more targeted advertising to consumers. The probe is being handled by SEC enforcement officials focused on cyber and emerging technologies, the report said.
The inquiry reportedly follows a whistleblower complaint filed earlier this year, along with several short-seller reports published in recent months. The regulator has not accused AppLovin or its executives of any wrongdoing, and the extent of the probe remains unclear, the Bloomberg report added.
An AppLovin spokesperson said that it does not comment on any potential regulatory matters. The SEC, meanwhile, stated that it was unable to respond to many media inquiries due to the ongoing US government shutdown.
AppLovin has been the target of multiple short sellers this year. Fuzzy Panda Research alleged in February that the company misappropriated data from Meta. Culper Research accused AppLovin of exploiting app permissions to enable advertisements that could trigger unauthorized app installations on users’ devices.
Muddy Waters Research, in a March report, claimed that AppLovin collected and structured user IDs from key platform partners—potentially breaching platform terms of service. However, two analysts later disputed Muddy Waters’ findings.
In response to these allegations, AppLovin said it has engaged law firm Quinn Emanuel to investigate short-seller activity.
(With inputs from Bloomberg)
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