A class action lawsuit was filed against AppLovin Corporation (APP) by Levi & Korsinsky on March 5, 2025. The plaintiffs (shareholders) alleged that they bought APP stock at artificially inflated prices between May 10, 2023 and February 25, 2025 (Class Period) and are now seeking compensation for their financial losses. Investors who bought AppLovin stock during that period can click here to learn about joining the lawsuit.
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AppLovin is an ad-tech company that connects companies with their ideal customers, with the goal of improving the marketing and monetization of client’s content.
The company’s claims about its new AI-enabled AXON 2.0 digital ad platform, as well as dishonest advertising practices aimed at increasing its own ad-clicks and app download rates are at the heart of the current complaint.
AppLovin’s Misleading Claims
According to the lawsuit, AppLovin and two of its senior officers (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about certain techniques used to drive app download numbers, and ancillary issues, from SEC filings and related material.
For instance, during the Class Period, the defendants reiterated that AppLovin was seeing an uptick in business performance driven by its AXON technology. Plus, the defendants noted that the company witnessed year-over-year market share growth as the AI-enabled platform was able to more efficiently match advertisements to mobile games.
Furthermore, the company planned to focus on three key growth initiatives, including upgrading its core machine learning AXON technology, expanding its ad solutions into Connected-TV, and extending its marketing platform to carriers and OEMs (original equipment manufacturers).
Throughout the Class Period, the company continued to report solid financial results, outlooks, and guidance to investors, which were allegedly supported by dishonest advertising practices.
However, subsequent events (discussed below) revealed that AppLovin engaged in unlawful advertising practices, which led to the temporary improvement in its overall business performance.
Plaintiffs’ Arguments
The plaintiffs maintain that the defendants deceived investors by lying and withholding critical information about the business practices and prospects during the Class Period. Importantly, the defendants are accused of misleading investors about their app download figures and advertising clicks data, which were later revealed by analysts.
The information became clear on February 26, 2025, when research reports by analysts accused AppLovin of using deceptive practices to boost its performance. The reports alleged AppLovin of reverse engineering and exploiting advertising data from social media platform Meta Platforms (META).
Additionally, the reports alleged that AppLovin was using manipulative tactics to artificially inflate their own ad click-through and app download rates. These techniques include having ads click on themselves or utilizing design gimmicks to “trigger forced shadow downloads, erroneously inflating installation numbers and, in turn, its profit figures.” Following the news, APP stock fell 12.2% on February 26.
To conclude, the defendants allegedly misled investors about the company’s business practices and deceptive advertising practices aimed at improving its app downloads and reportable figures. Owing to these challenges, APP stock has lost 5% so far this year.
