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Investing.com -- AppLovin (NASDAQ: NASDAQ:APP) stock declined 4% on Thursday after Culper Research published a short report targeting the mobile technology company, alleging misrepresentation of its Chinese ties and raising national security concerns.
The report claims AppLovin has "blatantly misrepresented the scope of both its Chinese shareholders and its Chinese operations," contradicting statements made by CEO Adam Foroughi who previously denied significant Chinese ownership. According to Culper, Chinese national Hao Tang controlled up to 28% of AppLovin Class A shares before the company’s 2021 IPO and still controls at least 9.8% of Class A shares through offshore shell companies.
Culper also alleges that AppLovin formed undisclosed agency agreements with two Chinese AdTech companies in January 2025 to expand cross-border e-commerce operations in China, despite Foroughi stating on the May 2025 earnings call that "we don’t operate inside China."
The short seller further claims that Tang has ties to the Chinese Communist Party, money laundering, illegal gambling, and human trafficking operations. The report also alleges Tang has entered into various margin loan agreements and share forward transactions that reportedly remain open as of May 2025.
This marks the latest in a series of short reports targeting AppLovin, following previous allegations from Muddy Waters, Fuzzy Panda, and Bear Cave. Culper itself published a separate report on AppLovin four months ago.
The report comes as AppLovin has expressed interest in merging with TikTok’s non-Chinese business, positioning itself as a natural buyer while emphasizing national security concerns - claims Culper characterizes as the company’s "final ’Hail Mary’ attempt" at stock promotion.