Short sellers have targeted AppLovin, alleging links to money laundering networks in China and Southeast Asia. Shares fell in response to the report’s claims, leading to increased volatility. AppLovin, a tech company based in Palo Alto, has seen significant growth driven by its AI-powered ad tech but is facing scrutiny and a recent stock price decline.

The company reported strong fiscal Q3 earnings, exceeding Wall Street expectations with revenue up 68% year-over-year. AppLovin’s software platform, particularly Axon 2.0, played a key role in driving revenue and profits. The company is set to release its Q4 and full-year 2025 earnings report, with high expectations for continued growth and profitability.

Claims from short sellers suggest AppLovin may be involved in illicit financial activities, using its ad ecosystem to launder money from Asia into U.S. markets. Concerns include transparency, technology misuse, and regulatory compliance. AppLovin has denied the allegations, emphasizing its adherence to regulations and data protection.

Despite the negative reports, some analysts like Piper Sandler remain optimistic about AppLovin’s growth potential, maintaining an “Overweight” rating and a price target of $800. The stock has a “Strong Buy” consensus rating from analysts, with a mean price target suggesting potential upside of 39% from current levels.

Investors are watching closely as AppLovin faces scrutiny, regulatory concerns, and a recent decline in stock price. While the company continues to deny allegations of wrongdoing, the impact on its reputation and stock performance remains uncertain.

Read more at Yahoo Finance: As Short Sellers Take Aim at AppLovin Stock Again, How Should You Play APP?