AppLovin’s 60% Slide: Short Reports, a Reported Probe and a Crowded Trade

AppLovin was one of the market’s biggest 2025 winners and one of its biggest 2026 losers. A stock that falls 60 percent in nine months usually has several causes. This one has allegations, a reported investigation and a lot of crowding.

• AppLovin closed 2025 at $673.82 and fell to $268.22 on October 2, 2026, down about 60 percent, its low for the year ^[1].
• CapitalWatch published a short report on January 19, 2026 alleging money laundering by two large shareholders; the stock fell nearly 6 percent on January 21 ^[2].
• AppLovin called the report “rife with false, misleading, and nonsensical allegations”; CapitalWatch did not provide documents or bank records showing the alleged flows ^[2].
• Bloomberg reported in October 2025 that the SEC was investigating data-collection practices; the SEC has not confirmed this ^[2].

The price

According to Yahoo Finance, AppLovin ended 2025 at $673.82 and closed at $268.22 on October 2, 2026, its lowest of the year and about 60 percent below the start ^[1].

The January report

On January 19, 2026, the research firm CapitalWatch alleged that two of AppLovin’s largest shareholders were using the company to facilitate money laundering, claiming they controlled networks on both sides of transactions. The stock fell nearly 6 percent on January 21 and later recovered part of that loss ^[2]. AppLovin denied the claims, calling the report “rife with false, misleading, and nonsensical allegations,” and sent a cease-and-desist letter ^[2].

The key weakness, MarketBeat noted, was evidence: CapitalWatch “did not provide documents, contracts, invoices, or bank records that clearly show money moving between allegedly illicit companies and AppLovin” ^[2].

The older shadows

The January report was not the first. In February 2025 two firms, Culper Research and Fuzzy Panda Research, accused AppLovin of exploiting app permissions and of gaming advertising platforms ^[3]. Bloomberg reported in October 2025 that the SEC was investigating AppLovin, focused on data-collection practices and app-store agreement violations rather than money laundering; the SEC has neither confirmed the probe nor filed charges ^[2].

Earlier short reports and the shape of the fall

The January report was not the first. Fuzzy Panda Research and Culper Research published short reports on February 26, 2025, with Culper alleging that AppLovin exploited app permissions to produce backdoor installs and that it gamed Meta’s platform to take credit for sales; the stock fell about 12 percent in that early-2025 episode, and Muddy Waters followed on March 27, 2025, with a 20 percent drop ^[2][3]. Even so, the stock rose about 108 percent during 2025, closing the year at $673.82 ^[2][1].

The shape of the 2026 slide is clear in MarketBeat’s numbers. From a 52-week high of about $734 on December 22, 2025 the shares fell 26 percent to about $544 by January 27, 2026; Needham issued a $700 price target on January 26, and by October 2 the stock was $268.22 with a price-to-earnings ratio of 20.62 ^[2]. Twenty-four analysts rated it “Moderate Buy” with a consensus target of $529.39, though a target is an opinion and not a price ^[2]. The article stresses that the CapitalWatch report lacks documents, contracts, invoices or bank records showing money moving between the alleged parties, and does not name the shareholders or their stakes ^[2]. The Bloomberg-reported SEC inquiry concerns data collection and app-store agreements, not money laundering ^[2].

What is known and what is not

• Known: the price fell about 60 percent; short reports were published; the company denies wrongdoing; a probe has been reported but not confirmed ^[1][2][3].
• Not known: whether any allegation is true, and how much of the decline stems from them instead of competition or valuation.

The honest reading is that a short report is a claim, not a finding, and that a stock’s fall is not proof of anything except a change in what investors are willing to pay. This is analysis, not investment advice.

Questions readers ask

Why is AppLovin stock down in 2026?

It has faced short-seller allegations, a reported but unconfirmed SEC inquiry, and a broad fall in price from $673.82 to $268.22; the company denies the allegations ^[1][2].

Has AppLovin been charged with wrongdoing?

Not according to the sources cited: the SEC has not confirmed an investigation or filed charges ^[2].