Another day, another knife out for AppLovin.
Bloomberg is reporting that the SEC “has been probing the data-collection practices” of the company, according to people familiar with the matter. The report adds that “the agency has specifically looked into allegations that AppLovin violated platform partners’ service agreements to push more targeted advertising to consumers.” Basically, they’re looking into whether AppLovin broke the rules set by partners – like using data it wasn’t supposed to – to make its ads more targeted.
The news follows recent criticism over AppLovin’s influencer marketing campaign promoting the global and self-serve availability of its flagship Axon platform.
Why This Matters:
AppLovin has long been a target of short sellers, though some of the claims have been questionable—and in certain cases, from bizarre actors. Bloomberg’s report, however, carries more weight. Bloomberg plus an SEC report are, obviously, more credible. Following the news, AppLovin’s stock immediately dropped roughly 15%.
See this screengrab which basically tells the story:
Experts React:
Here’s what X is saying about the report:
Our Take:
Could be nothing, could be something—but it’s definitely worth watching. AppLovin understandably declined to comment as companies can’t always confirm or deny the existence of an SEC investigation unless formally notified. For now, this adds another layer of scrutiny to one of adtech’s most-watched (and maybe biggest?) players. More to come as details emerge.
FWIW, AppLovin’s CEO Adam Foroughi was on TBPN last week describing AppLovin as “biggest company in the world where no one understands what we do.” PS, the confusion here might actually speak to the scrutiny.
A few months ago, it was reported that AppLovin was bringing on legal counsel to help it push back against short reports. Obviously, they’ll need that legal firepower now more than ever.
AppLovin has been on a major upswing this year, thanks in large part to the success of its Axon AI engine, which powers ad targeting and optimization across its network. The company has also benefited from the ongoing rebound in mobile ad spending and has positioned itself as a leading independent alternative to Google and Meta in mobile app monetization (they even tried to buy TikTok!). Obviously, an SEC probe—even preliminary—could cloud that momentum and renew investor skepticism around the company’s practices.
