volatility might persist for a while.
I’ve read both of the recent short reports on AppLovin, along with the company’s response, and I think it’s worth slowing down and applying some basic common sense before assuming the worst. A lot of what’s being circulated sounds scary on the surface, but once you actually think through the logic, much of it doesn’t really add up.
The core claim that AppLovin is being used as a money-laundering vehicle through advertising just doesn’t make much sense operationally. If someone wanted to launder money, concentrating activity through a single, highly logged, audited, bank-connected ad platform would be one of the worst ways to do it. Real money laundering spreads activity across many channels, avoids concentration, stays below anomaly thresholds, and avoids public visibility. If advertising were some magical laundering rail, the obvious approach would be to spread spend across Google, Meta, TikTok, Unity, AppLovin, and others, while owning zero shares in any of those companies. Buying a large, visible stake in a U.S. public company while allegedly laundering money through it would do the opposite of what criminals usually want — it would invite scrutiny, trigger SEC disclosures, and draw exactly the kind of attention we’re seeing now.
It’s also important to separate the idea that ad platforms can be abused from the claim that this specific company is laundering money. Yes, bad actors attempt to abuse advertising systems. That’s true for every major ad platform on earth. What the reports never actually show, however, are traced bank flows, transaction IDs, payment processor records, or a clear path showing money moving from criminal activity through AppLovin and back to the same network. Instead, they describe a theoretical mechanism and then treat that mechanism as proof. That’s not how real money-laundering cases are built.
The focus on AppLovin’s shareholders is also largely a distraction. Public companies are not banks, and they do not perform AML checks on shareholders in the way financial institutions do. They rely on ownership disclosures, and markets are full of investors with offshore structures and complex backgrounds. Unless a shareholder is sanctioned or the company is actively helping move illicit funds, share ownership by itself doesn’t imply corporate wrongdoing. If having a controversial or opaque shareholder were enough to sink a company, a huge portion of the public markets would be uninvestable.
The China angle in the second report is similarly overstated. When the CEO said AppLovin does not “operate in China,” that’s standard investor language meaning there is no commercial business, no customers, and no revenue exposure in China. It does not mean the company has zero Chinese employees or zero engineers located there. Hiring Chinese AI and machine-learning talent is completely normal and extremely common — a massive share of the world’s AI talent is in China, and virtually every major U.S. tech company hires from that pool. The short report tries to reinterpret “operate in China” to mean “no Chinese employees exist anywhere,” which is not how investors, analysts, or regulators interpret that phrase.
What’s also telling is what we haven’t seen. If this were real money laundering at scale, banks and payment processors would already have flagged it, accounts would be frozen, and regulators would not be relying on short seller PDFs to discover it. So far there have been no DOJ charges, no OFAC actions, no asset freezes, no auditor resignations, and no visible advertiser exodus. Instead, we’ve seen escalating rhetoric and promises of future evidence. When evidence is strong, reports tend to get calmer and more precise, not more emotional and threatening.
Finally, it’s worth grounding all of this in reality. Short reports attack narratives, but markets eventually care about cash. AppLovin’s customers continue to say the product works, advertisers keep spending, cash flow is real, and the company is aggressively buying back shares. Companies on the brink of regulatory shutdown do not behave like that.
None of this means investors should ignore everything or blindly dismiss risk, but it does mean that this situation looks far more like volatility driven by fear and narrative than by proven facts.
