Short-seller CapitalWatch apologizes, retracts report on AppLovin shareholder

In a significant turn of events, short-seller CapitalWatch has publicly apologized and retracted its previous assertions regarding a key shareholder of AppLovin. The report, which surfaced last month, made serious allegations linking Hao Tang to various criminal enterprises, claims that CapitalWatch now acknowledges were unfounded. In their apology posted on X, CapitalWatch stated, "Descriptions asserting direct connections between Mr. Tang and Chen Zhi, Prince Group, Jin Bei Group, Tang Jun, and Yang Zhihui were inaccurate and failed to meet our publication standards." The firm emphasized the retraction was necessary to correct misinformation and to safeguard the legal rights of those involved. Despite retracting the allegations, CapitalWatch's original report remains accessible on their website. Two weeks prior, AppLovin had demanded a retraction of what they termed a "defamatory and baseless" report, sending a cease and desist letter through their attorney, Alex Spiro, who is known for representing high-profile clients like Elon Musk. Initially, CapitalWatch stood by its claims, asserting that its report was the result of a thorough six-month investigation complemented by documentary evidence and multiple sources. However, in their latest statement, the company admitted to mistakenly linking a ruling from the Court of Bordeaux with Tang. While the retraction of the allegations marks a change in the narrative, CapitalWatch has reiterated that its evaluation of AppLovin’s financial situation remains unchanged, indicating that further reports on the company will follow. In their apology, they expressed regret for any distress caused to Mr. Tang and the potential repercussions on his reputation. As the situation unfolds, CNBC has sought comments from representatives connected to Tang, AppLovin, and CapitalWatch. AppLovin has previously faced scrutiny from various short-sellers, including Muddy Waters and Fuzzy Panda, with CEO Adam Foroughi vocally opposing the allegations, claiming they are designed to undermine the company's success and manipulate its stock price. Since going public in April 2021 at approximately $65 per share, AppLovin's stock has skyrocketed, increasing more than 713% in 2024 and currently trading above $450 per share.