SEC Investigates AppLovin’s Data Collection Practices
The Securities and Exchange Commission (SEC) is investigating AppLovin Corp.’s data-collection methods. This inquiry follows allegations that the mobile advertising technology company violated its platform partners’ service agreements. Insiders report that the probe focuses on AppLovin’s practices of delivering targeted advertising.
AppLovin Share Price Reaction
The news of the SEC investigation led to a significant drop in AppLovin’s stock. Shares plummeted by as much as 19%, reaching $550.15. This marked the largest intraday decline for the company in six months.
Details of the Investigation
- The SEC’s review stems from a whistleblower complaint filed earlier this year.
- Multiple short-seller reports have also raised concerns about the company’s practices.
- Although SEC inquiries can result in penalties, no accusations of wrongdoing have been made against AppLovin at this time.
AppLovin’s Corporate Response
AppLovin has chosen not to comment specifically on the investigation but emphasized its usual practice of addressing regulatory inquiries. The company stated, “Material developments, if any, would be disclosed through appropriate public channels.”
Company’s Market and Legal Standing
AppLovin has seen exceptional market growth, nearly doubling its valuation to over $230 billion this year. This positions it close to Salesforce Inc.’s market cap. The company recently joined the S&P 500 Index.
Short-Seller Accusations
Various reports from short-sellers such as Fuzzy Panda and Muddy Waters have alleged that AppLovin exploits its position in the mobile advertising ecosystem. They claim that the company improperly collected proprietary identifiers to enable unauthorized user tracking across digital platforms.
Management’s Defense
CEO Adam Foroughi has publicly rejected these claims as inaccurate. In a blog post, he denied the creation of persistent identifiers known as device fingerprints. Additionally, AppLovin has enlisted prominent attorney Alex Spiro to conduct an independent investigation into these short-seller reports.
Partnerships and Compliance
AppLovin collaborates with major platforms such as Meta Platforms, Amazon, and Google. Apps utilizing AppLovin’s technology must adhere to guidelines set by app stores operated by Apple and Google. While the SEC’s investigation is focused on AppLovin, there is no indication that the conduct of its partners is under scrutiny.
Looking Ahead
As the investigation continues, the future of AppLovin’s business practices and regulatory compliance remains uncertain. The company has stated that its review process is ongoing, aiming to clarify the basis of the short-seller claims.
