AppLovin Shares Rebound as Short Seller Retracts Key Allegations

Shares of AppLovin surged 14% Monday after short seller CapitalWatch apologized for and retracted a report that accused a major shareholder of the mobile advertising company of financial crimes. The report, published last month, had alleged connections between shareholder Hao Tang and criminal syndicates.

In an apology posted on social media Sunday, CapitalWatch stated that descriptions linking Tang to specific individuals and groups were inaccurate and did not meet its publication standards. The firm said it removed the relevant passages to prevent misinformation and protect legal rights, though the original report remains on its website. The retraction follows a cease and desist letter sent two weeks ago by AppLovin's lawyer, Alex Spiro, who called the report "defamatory and baseless."

CapitalWatch had initially defended its investigation. In its apology, the firm admitted it "erroneously associated" a French court ruling with Tang. While offering "sincere apologies" for the distress caused to Tang, CapitalWatch maintained its critical view of AppLovin's financials and said it would continue reporting on the company.

AppLovin has been a frequent target of short sellers. CEO Adam Foroughi has consistently denied their allegations, calling them false claims aimed at manipulating the stock price for profit. Despite the criticism, AppLovin's stock performance has been formidable, rising over 713% in 2024 and trading above $450 per share, a significant increase from its 2021 IPO price of approximately $65.

Source: CNBC