AppLovin $APP ( ▼ 1.99% ) is trying to put out a five-alarm fire on Wall Street.
After getting clobbered Tuesday following a CapitalWatch report that accused the company of being tied to money laundering for “transnational criminal kingpins,” AppLovin managed to bounce off its lows into the close. But the selling came right back Wednesday, with shares ending down nearly 6% as the market digested the allegations and the reputational risk.
AppLovin fires back hard
The company didn’t go with a soft PR statement. It went nuclear.
In an emailed response, an AppLovin spokesperson called the report “false, misleading, and nonsensical,” and said the firm’s public filings already disclose its investments, operations, and major shareholders in a transparent way.
They also flat-out rejected the core accusations, saying claims that AppLovin facilitates money laundering or supports unauthorized downloads are “patently false.”
The core defense: the laundering theory doesn’t even make economic sense
AppLovin’s biggest argument is basically: even if someone wanted to launder money through ads, this wouldn’t be the place.
They pointed out that publishers only receive a portion of advertiser spend, meaning anyone trying to route illicit money through the system would be voluntarily burning a big chunk of it.
And even worse, they’d be doing it through a highly traceable chain of transactions involving multiple third parties like app stores, operating systems, and payment providers.
So AppLovin’s logic is simple:
If CapitalWatch’s claim is true, it’s not just an AppLovin scandal. It implies a systemic failure across the entire mobile ad ecosystem, and the report doesn’t provide evidence for that.
Bottom line
This is the kind of controversy that doesn’t trade like normal earnings news.
Even if the allegations don’t stick, the stock can still stay under pressure because investors hate one thing more than weak growth: headline risk that invites regulators, lawsuits, and forced disclosure.
For now, the market is treating this as “guilty until proven boring.”