AppLovin Stock (APP) Falls after Short Seller Says It’s Hiding Chinese Ownership

Shares of AppLovin (APP) are down in today’s trading after short seller Culper Research accused the mobile tech company of misleading investors about its Chinese ownership and business connections. In a new report, the firm claims that Chinese national Hao Tang once controlled up to 28% of AppLovin’s Class A shares before its IPO and still holds about 9.8% through undisclosed offshore entities. The report also highlighted undisclosed margin loans, secret advertising deals with Chinese firms BlueFocus and eClickTech, and alleged links to surveillance and data practices, which raise concerns about national security.

Culper further alleges that AppLovin CEO Adam Foroughi misled the public when stating that Chinese investors “don’t make up a material part” of the company’s ownership. The report claims that AppLovin deliberately cleaned up its records ahead of its recent bid to acquire TikTok and consistently downplayed Chinese investments in violation of SEC disclosure rules.

As a result, the report warns that these hidden ties could expose AppLovin to both financial and geopolitical risks, especially since there are growing worries over data privacy and security. In addition, Culper argues that the company’s public messaging around national security is misleading, given its undisclosed Chinese connections. Therefore, investors are being cautioned about the potential for regulatory scrutiny and any type of fallout tied to AppLovin’s ownership structure.

Is APP Stock a Good Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on APP stock based on 16 Buys, three Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average APP price target of $503.29 per share implies 34.3% upside potential.

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