AppLovin stock tanks on report SEC is investigating company over data-collection practices

Shares of AppLovin faced a significant decline on Monday following a report from Bloomberg indicating that the Securities and Exchange Commission (SEC) is investigating the mobile advertising firm regarding its data-collection practices. The SEC's inquiry is focusing on potential violations related to agreements on delivering targeted advertisements to consumers, as revealed by sources familiar with the situation. This scrutiny comes in response to a whistleblower complaint filed earlier this year, in addition to various reports from short-sellers raising concerns about the company's operations. Despite this downturn, AppLovin's stock has experienced remarkable growth this year, surging approximately 80% and previously skyrocketing over 700% in 2024. This impressive performance has largely been attributed to the company's advancements in artificial intelligence technology, which have enhanced its ad targeting capabilities for brands. Notably, AppLovin recently earned a spot in the S&P 500, replacing MarketAxess Holdings, while Robinhood took over the index position previously held by Caesars Entertainment. This inclusion occurred despite attempts by short-seller Fuzzy Panda Research to prevent AppLovin's entry into the prestigious benchmark. In December, AppLovin's shares fell by 15% when the S&P committee opted to add Workday instead. This developing story continues to unfold, and updates will be provided as more information becomes available.