AppLovin logo placed on a laptop in New York, February 26, 2025.
Gabby Jones Bloomberg | Getty Images
Short-seller Capital Watch accused a major brokerage firm, apologized, and amended its report. App Lovin Financial crime shareholders.
After the withdrawal, AppLovin’s stock price soared 14%.
The report, released last month, alleges ties between Hao Tan and criminal organizations, but short sellers now claim that is inaccurate.
“The statements alleging direct connections between Mr. Tang and Chen Zhi, Prince Group, Jinbei Group, Mr. Tang Run, and Mr. Yang Zhihui were inaccurate and did not meet our publication standards,” Capital Watch said in X’s apology published on Sunday.
“In view of these factual discrepancies, and in order to prevent the spread of misinformation and protect the legal rights of the parties involved, we have decided to remove and withdraw the text relating to Mr. Tan personally,” the short seller added.
The original report is still posted on the website.
AppLovin demanded Capital Watch retract its “defamatory and unsubstantiated” report two weeks ago in a cease-and-desist letter from attorney Alex Spiro.
Spiro also represents other high-profile clients such as Elon Musk.
Capital Watch initially defended its report after the suspension letter was sent, writing a follow-up statement on X, saying the report “reflects a rigorous six-month investigation supported by documentary materials and multiple sources.”
In its apology, Capital Watch said it had “erroneously associated” the Bordeaux court decision with Tan.
Despite the retraction, the short seller wrote that his stance on AppLovin’s financials remains unchanged and that he will continue to post reports on the company.
“Capital Watch sincerely apologizes to Mr. Tan for the distress and potential impact on his personal reputation,” the short seller said in its apology.
CNBC has reached out to representatives from Tang, AppLovin, and CapitalWatch for comment.
AppLovin has been the subject of critical reporting in the past from multiple short sellers, including Muddy Waters, Fuzzy Panda, and Calper Research.
AppLovin CEO Adam Foroughi denied these allegations.
“It is unfortunate that a small number of nefarious short sellers are making false and misleading claims designed to undermine our success and depress our stock price for their own financial gain,” Forogi wrote in response to last year’s Fuzzy Panda and Culper reports.
The advertising company’s stock has grown rapidly since it went public in April 2021 at about $65 per share.
The stock has soared more than 713% in 2024 and is currently trading above $450 per share.
