Shorts Feast After SEC Catches AppLovin Peeking Through Their Customers Digital Blinds ($8.6B Gone)

“Hey Alexa, how f*cked is AppLovin?”

Pretty f*cked, apparently.

Shares of AppLovin got kicked to the basement yesterday after reports surfaced that the SEC is poking around the company’s data-collection practices… a fancy way of saying, “Hey, are you secretly stealing everyone’s data… again?”

The probe reportedly started after a whistleblower and a few short-seller hit pieces accused AppLovin of breaking partner rules (think Meta, Google, Apple) by allegedly using unauthorized tracking tools to sling hyper-targeted ads. Or, as SEC Chair Paul Atkins might phrase it: “Did you really need to know what kind of shampoo Karen in New Jersey uses?”

AppLovin, of course, denies everything. The company insists it “regularly engages with regulators” and will disclose any “material developments.” Translation: Please stop calling, we’re spiraling just fine over here.

The market, however, didn’t care. The stock dove nearly 19% intraday, vaporizing $8.65 billion in wealth for top execs and early investors. CEO Adam Foroughi personally lost an estimated $3.4 billion.

(Source: CNBC)

And as for who blew the whistle? Take a number. Between short-seller outfits like Fuzzy Panda, Muddy Waters, and Culper Research, this thing’s got more anonymous tipsters than a Wall Street Bets Reddit thread during earnings season. To make it worse, the probe is being handled by the SEC’s Cyber and Emerging Tech Unit… the same crew that’s been chasing down crypto bros, AI pumpers, and anyone who uses “algorithm” as a verb.

But wait, AppLovin’s got a counterattack. They called in Elon Musk’s legal hitman, Alex Spiro… the guy you hire when you want to look innocent but also slightly unhinged. He’s now heading up what they’re calling an “independent review,” which sounds about as unbiased as a Yelp review from the CEO’s mom.

It was about time thunderstorm clouds started to form… AppLovin’s been one of 2025’s biggest AI success stories… its market cap exploded to $230 billion, rivaling Salesforce, after being added to the S&P 500. But when your whole business model is “we know what users want before they do,” you can’t act surprised when the SEC asks how, exactly, you know that.

Still, the market’s got the attention span of a TikTok feed. After getting smoked yesterday, AppLovin shares jumped 7% this morning, suggesting investors have already forgiven, forgotten, or just moved on to the next shiny AI ticker.

At least for now… the “Lovin” seems mutual again.

At the time of publishing this article, Stocks.News holds positions in Meta, Google, and Apple as mentioned in the article.