On Monday, AppLovin sent a cease-and-desist letter to short-seller CapitalWatch demanding the immediate retraction of its 35-page report, which labeled the ad-tech firm a "digital laundromat" for criminal syndicates. The letter calls the report’s allegations "absurd and demonstrably false," and refers to its findings as "conspiratorial musings." AppLovin specifically objects to claims of "systemic compliance risks and suspicions of major financial crimes" within its capital structure, demanding the removal of both the original report and any subsequent statements from all public channels.

CapitalWatch tied major shareholder Hao Tang to Chen Zhi, chairman of Cambodia-based Prince Group, which U.S. authorities in October charged with wire fraud conspiracy and money laundering conspiracy. Those charges were accompanied by the seizure of approximately $15 billion in bitcoin and a U.S. Treasury designation of Prince Group as a Transnational Criminal Organization. AppLovin’s letter emphatically rejects any business relationship with Prince Group or its affiliates, noting that no evidence has been presented to substantiate the alleged ties in Hong Kong capital markets or Southeast Asian ventures.

Separately, Needham upgraded AppLovin from Hold to Buy and set a $700 price target, citing increased confidence in the company’s e-commerce revenue trajectory for 2026. The firm raised its 2026 e-commerce revenue estimate to $1.45 billion from $1.05 billion, driven by expectations for sequential growth in the first quarter and accelerated advertiser demand following the launch of AppLovin’s self-service platform. Shares responded with an intraday gain exceeding 5%, as investors welcomed the improved entry point following a recent pullback.