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AppLovin Faces Money-Laundering Claims—Here's What's Missing
Written by Leo Miller. Posted: 1/28/2026.
Key Points
- AppLovin has faced a series of short-seller reports over the past year, with CapitalWatch issuing the first such report of 2026.
- The company strongly denies CapitalWatch’s allegations that its business was used to facilitate money laundering.
- Despite the recent decline in shares, analysts see strong upside potential in APP.
For advertising technology stock AppLovin (NASDAQ: APP), short reports—critical research notes published by investors betting the stock will fall—have become a recurring theme. Critical reports from Fuzzy Panda Research and Culper Research were released early in 2025, helping push AppLovin shares down more than 12% on Feb. 26, 2025. A month later, on Mar. 27, research firm Muddy Waters released another report, sending the stock tumbling over 20%.
Despite multiple reports in recent months, markets and Wall Street analysts have largely brushed off those concerns. AppLovin rose roughly 108% in 2025 as the company produced several strong earnings reports, and some price targets have climbed as high as $860—well above the $450 range seen in early 2025.
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AppLovin faced another sell-off at the start of 2026 after a short report from CapitalWatch caused shares to drop nearly 6% on Jan. 21. The stock recovered some of those losses in subsequent sessions. Markets often react quickly to headline-driven short reports regardless of their ultimate merit, which raises the question of how investors should evaluate the claims and what context might be missing from the broader narrative.
Below we break down what short sellers are alleging and provide an updated outlook on AppLovin.
CapitalWatch Claims APP Is Involved in a Money-Laundering Scheme
CapitalWatch accuses AppLovin of being used to launder money, alleging that two of the company's largest shareholders control networks of companies on both sides of advertising transactions, with AppLovin in the middle.
AppLovin operates a programmatic ad platform that matches advertisers with publishers and facilitates auctions for ad space, taking a fee for each transaction. For example, if an advertiser pays $1,000 for placement and AppLovin takes a 25% fee, the publisher would receive $750.
CapitalWatch claims these two shareholders orchestrate transactions through affiliated entities on both sides of the exchange, funneling funds through AppLovin to obscure their origin and purportedly launder money from illegal activities.
AppLovin Categorically Denies CapitalWatch's Claims
AppLovin issued emailed statements to media outlets calling the CapitalWatch report "rife with false, misleading, and nonsensical allegations," and described the money-laundering claims as "patently false." The company said the report misunderstands its business model and compliance practices, and it has sent CapitalWatch a cease-and-desist letter, labeling the report's assertions "conspiratorial.”
While CapitalWatch draws associations suggesting links to an extensive crime network in Asia, the report does not include primary evidence—such as contracts, invoices, or bank records—clearly showing illicit funds moving between the alleged entities and AppLovin.
It's also important to remember that authors of short reports can profit if the stock falls after publication. Short sellers who take positions before releasing damaging research have a financial incentive to publish negative findings. AppLovin's sharp share drops after earlier short reports in 2025 demonstrate that this strategy can move markets.
Separately, Bloomberg reported in October that the SEC is investigating AppLovin, but the agency has not confirmed or announced any wrongdoing. That alleged inquiry reportedly focused on the company's data collection practices and potential violations of agreements with app store operators such as Apple (NASDAQ: AAPL). Since Bloomberg's initial reporting there have been no public enforcement actions or updates tied to that matter.
Analysts See Upside Despite the Accusations
AppLovin faces meaningful regulatory, reputational, and legal risks. Still, short-seller reports to date have not produced confirmed regulatory action or sustained investor panic. Ongoing regulatory inquiries and a class action lawsuit involving the company remain key risks to monitor.
Shares hit a 52-week closing high near $734 on Dec. 22, then traded around $544 at the Jan. 27 close—a decline of roughly 26% from that high.
Wall Street analysts, however, see substantial upside. Needham and Company issued a $700 price target on Jan. 26, shortly after the CapitalWatch report, and the consensus price target sits around $706, implying roughly 30% upside from recent levels.
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