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AppLovin Corporation experienced a dramatic sell-off on Monday, October 6, 2025, after Bloomberg reported that the Securities and Exchange Commission has been investigating the mobile advertising company over its data-collection practices. The stock plummeted 14% during regular trading and continued falling another 3.28% in pre-market hours on Tuesday to $567.75 as of 6:16 AM EDT. The investigation centers on allegations that AppLovin may have violated service agreements with platform partners to deliver more targeted advertising to consumers, though the SEC has not formally accused the company or its officials of any wrongdoing.
SEC Inquiry Focuses on Data Practices and Potential Policy Violations
According to Bloomberg’s report, the SEC investigation is responding to a whistleblower complaint filed earlier this year, along with multiple short-seller reports targeting the company. The agency is examining whether AppLovin systematically violated app store terms of service by extracting proprietary user identification data from major platforms including Meta, Snap, TikTok, Reddit, and Google without proper consent. This practice allegedly enabled AppLovin to funnel highly targeted advertisements to users who had not authorized such data collection.
AppLovin issued a measured response to the investigation news, with a company spokesperson stating that as a global public company, they “regularly engage with regulators and if we get inquiries we address them in the ordinary course.” The spokesperson emphasized that AppLovin does not typically comment on the existence or non-existence of regulatory matters, and noted that any material developments would be disclosed through appropriate public channels. This marks the latest challenge for a company that has faced scrutiny from prominent short-sellers including Muddy Waters Research, Fuzzy Panda Research, and Culper Research over similar data practice concerns.
APP’s High-Flying Run Faces Setback Ahead of November Earnings
Despite the sharp decline, AppLovin’s stock had been on an extraordinary run prior to this news. The company’s shares surged over 80% year-to-date in 2025, following a remarkable 700% gain in 2024, driven largely by its AI-powered AXON advertising technology platform. As of the previous close on October 6, APP traded at $587.00 with a market capitalization of $198.55 billion and a trailing P/E ratio of 80.63. The stock’s 52-week range spans from $139.40 to $745.61, illustrating its volatile trajectory.
Analyst sentiment remains mixed, with price targets ranging from a low of $250 to a high of $860, and an average target of $614.50—just above current pre-market levels. The company’s strong fundamentals include a profit margin of 42.35%, return on equity of 253.77%, and trailing twelve-month revenue of $5.74 billion. However, with upcoming earnings scheduled for November 5, 2025, investors will be closely watching both the company’s financial performance and any updates regarding the SEC investigation. The timing of this probe is particularly notable given AppLovin’s recent addition to the S&P 500 index in September 2025, replacing MarketAxess Holdings.
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