AppLovin Faces Investor Backlash Over Fraud Allegations, $17 Billion in Value Wiped Out

Short seller reports accuse AppLovin of deceptive AI practices, ad fraud, and illegal data tracking, prompting sharp stock declines.

Two short-selling firms, Fuzzy Panda Research and Culper Research, have accused AppLovin of fraudulent practices involving its AI-powered ad technology, AXON 2.0.
The reports claim AppLovin exaggerated AXON’s capabilities, used deceptive ad tactics, and engaged in unauthorized data collection, including tracking children.
AppLovin’s stock plummeted 12% on February 26, 2025, marking a $17 billion loss in market value, with shares briefly halted due to volatility.
AppLovin CEO Adam Foroughi dismissed the allegations as false and misleading, emphasizing the company’s compliance with app store policies.
Despite the controversy, AppLovin’s recent financial performance has been strong, with ad revenue climbing 73% in the last quarter and continued bullish sentiment from some analysts.