AppLovin stock sinks after SEC investigation reports
AppLovin shares took a sharp hit on Monday, sliding over 14% after reports emerged that the US Securities and Exchange Commission (SEC) is investigating the company’s data collection practices.
The stock closed at $587.00 per share on Nasdaq, marking a 14.03% drop, and slipped another 2.29% in after-hours trading.
According to a Bloomberg report citing sources familiar with the matter, the SEC’s cyber and emerging technologies enforcement team is reviewing claims that AppLovin may have violated service agreements with platform partners to deliver more targeted advertising.
What triggered the SEC probe?
The inquiry reportedly follows a whistleblower complaint filed earlier this year and a series of short-seller reports that accused AppLovin of mishandling user data.
While the SEC hasn’t made any formal accusations or charged the company, the probe’s scope remains uncertain. The ongoing US government shutdown has further limited the regulator’s public response, as officials cited restrictions on handling media queries.
An AppLovin spokesperson said the company “does not comment on any potential regulatory matters.”
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Allegations by short-sellers pile up
AppLovin has been in the crosshairs of multiple short-seller research firms throughout 2025.
- Fuzzy Panda Research claimed in February that the company misappropriated Meta’s user data.
- Culper Research alleged AppLovin exploited app permissions to push unauthorized app installations.
- Muddy Waters Research, in a March report, accused the firm of structuring user IDs from partner platforms, potentially breaching service terms.
However, these claims have been disputed by two independent analysts, and AppLovin has denied any wrongdoing.
In response, the company hired law firm Quinn Emanuel to review short-seller activity and protect its reputation.
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What investors should know
The recent sell-off comes at a time when investor confidence in ad-tech firms has already been shaky due to data privacy concerns and tighter US regulations.
Analysts say the SEC’s involvement could add more pressure, especially if the probe widens to include platform-level data integrations.
Despite the steep fall, some market watchers believe the long-term fundamentals of AppLovin’s business may hold, provided the company can clear regulatory clouds and restore market trust.
(With inputs from Bloomberg)
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