New York, Jan 29, 2026, 11:45 ET — Regular session
- AppLovin shares climbed roughly 2% in late-morning action, bouncing back from a shaky start to the week.
- The move came after the company issued a cease-and-desist letter to short seller CapitalWatch, demanding a retraction.
Shares of AppLovin Corporation climbed 1.7% to $551.58 in late-morning trading Thursday following news the advertising software company has called for a retraction of a recent short-seller report. 1
The letter is significant as AppLovin’s stock has been volatile this month, with traders quick to react against news on governance and compliance. The shares dropped almost 6% on Jan. 21 but have climbed in three of the past four sessions, leaving the stock still trying to find a stable footing. 2
Mobilegamer.biz, referencing CNBC, reported that AppLovin issued CapitalWatch a cease-and-desist letter, labeling the allegations as “defamatory and baseless.” The company also dismissed the report as filled with “numerous absurd and demonstrably false statements.” 1
Short sellers borrow shares to sell now, hoping to repurchase them cheaper later; this strategy can magnify price swings, especially when a stock faces heavy shorting or weak conviction. AppLovin has frequently been targeted by short reports, with each fresh wave often spilling over into options trading and momentum-driven moves.
The company’s move beyond mobile-game ads into e-commerce marketing has become another tailwind, with investors trying to size up the potential of this next growth phase. Needham upgraded the stock to “buy” from “hold” this week, setting a $700 price target. They highlighted rising adoption of AppLovin’s Axon tools and fresh e-commerce brands jumping on board. Analyst Bernie McTernan noted, “it is still early days.” 3
AppLovin’s focus on e-commerce is what still puts it in the same league as much bigger ad platforms, though the comparison is far from perfect. The stock behaves more like a leveraged bet on how well the company executes. The real test going forward: can it keep onboarding web advertisers without margins slipping or stricter platform regulations cutting in?
On the downside, it’s simple: expect more volatility, tighter scrutiny, and less room for errors. Bloomberg reported in October that the U.S. Securities and Exchange Commission is investigating AppLovin’s data-collection methods. This cloud could darken further if regulators or platform partners intensify their review of ad targeting tactics. 4
Investors are keeping an eye on whether the legal battle over CapitalWatch will dampen the momentum or prolong the saga, leaving the stock vulnerable to a steady drip of headlines. A turbulent trading tape can inflict real harm if it lines up with weak guidance or a disappointing miss.
AppLovin plans to release its fourth-quarter and full-year 2025 earnings on Feb. 11, right after the U.S. market shuts. A management webinar will follow at 5:00 p.m. ET. 5
