New York, January 20, 2026, 10:26 EST — Regular session underway.
- AppLovin shares dipped in early trading following a CapitalWatch report that tied the company to compliance issues and illicit funds.
- The stock dipped to a session low of $501 before recovering most of the loss.
- Attention now turns to the company’s reaction and its earnings report due February 11.
AppLovin Corp shares dropped Tuesday following a report from research firm CapitalWatch accusing the advertising software company of connections to illicit money flows. The stock slipped 1.2% to $562.21, after tumbling as much as 12% to $501.01 earlier in the day.
The report arrives at a sensitive time for AppLovin, a stock often seen as a barometer for digital ads and app-based growth. New allegations risk rattling momentum investors just as the next earnings report looms, even before the truth is clear.
Regulatory risk has been looming over the company. Bloomberg News revealed in October that the U.S. Securities and Exchange Commission was investigating AppLovin’s data-collection methods. AppLovin responded then by declining to comment on potential regulatory issues. 1
CapitalWatch’s Jan. 19 report traced what it called illicit funds within AppLovin’s shareholder network and flagged the company for weak compliance controls. It also pointed to anti-money-laundering (AML) rules—measures aimed at preventing illegal money flows through financial systems.
AppLovin has yet to respond to the CapitalWatch report. CEO Adam Foroughi has previously dismissed the short-seller claims as “false and misleading.” Short sellers wager on a stock’s decline. On Tuesday, U.S. equities fell, with the Nasdaq dropping 1.7% and the S&P 500 losing 1.4%, according to Investing.com. 2
Other ad-tech stocks slipped but steered clear of AppLovin’s volatility. The Trade Desk dropped roughly 2%, Unity Software fell about 1%, and Magnite edged down 0.3%.
Traders are watching to see if the company responds swiftly to the report or waits for the upcoming earnings to make its case. In these battles, liquidity often dries up quickly, and the initial move usually isn’t the final one.
Bulls face the risk that the report could prompt regulators or business partners to scrutinize AppLovin’s ad systems more closely. Even absent any official investigation, concerns might dampen advertiser demand, as no one wants to get tangled in a compliance headache.
AppLovin Corporation, known for its marketing software that assists advertisers in buying and tracking mobile ads, is set to release its fourth-quarter and full-year 2025 results after the market closes on Feb. 11, followed by a webcast at 5 p.m. ET. Ahead of the report, investors will be watching closely for any comments from the company regarding the CapitalWatch allegations and for any unusual activity in its filings. 3
