On March 28, 2025, the Law Offices of Frank R. Cruz announced the filing of a class-action lawsuit against AppLovin Corporation (NASDAQ: APP), alleging significant securities fraud. The lawsuit, filed in the United States District Court for the Northern District of California, is titled *Brownback v. AppLovin Corporation, et al.*, and it seeks redress for investors who purchased AppLovin securities during the defined class period from May 10, 2023, to February 25, 2025.

Key Allegations

The lawsuit comes on the heels of a damaging report published by Culper Research on February 26, 2025. The report accused AppLovin of systematically exploiting app permissions to artificially inflate its mobile gaming results. Additionally, it alleged that the company’s e-commerce operations operate as a “rigged game” that involves stealing advertising attribution from Meta, a major player in the digital advertising space.

Another report, released the same day by Fuzzy Panda Research, further detailed these allegations, claiming that AppLovin had reverse-engineered Meta’s targeting methods to misappropriate referral credits from advertisers. This report also raised concerns about AppLovin's click-through rates (CTR), which reportedly soared to levels between 30% to 40%, significantly higher than industry norms, leading experts to label these figures as indicative of "ad fraud."

Market Reaction

The market's response to these allegations was swift and severe. On February 26, 2025, AppLovin's share price plummeted by $46.06, or 12.2%, closing at $331.00 per share, amidst unusually heavy trading volume. This dramatic decline reflects the market's reaction to the revelations about the company’s questionable advertising practices and the potential implications for its financial health.

2. Details of the Class Action Lawsuit

The class action lawsuit claims that AppLovin made materially false and misleading statements, while also failing to disclose critical adverse facts about its business operations and financial prospects. Key points raised in the lawsuit include:

Exploitation of Fraudulent Advertising Practices: The defendants allegedly failed to disclose that AppLovin's app segment relied on fraudulent practices such as clickjacking and click spoofing.

Misappropriation of Advertising Attribution: The e-commerce program purportedly involved intercepting and appropriating advertising credits, further inflating reported revenues.

Forced Installations: Allegations were made regarding a backdoor scheme that forced unwanted apps onto customers, raising serious ethical questions about user consent.

Inflated Revenue Claims: The lawsuit argues that these practices led to artificially inflated revenues, undermining the integrity of AppLovin's financial statements.

Misleading Positive Statements: As a result of these practices, the defendants’ positive statements about the company’s business and prospects were deemed materially misleading.

Call to Action for Affected Investors

Investors who suffered losses due to their AppLovin investments during the class period are notified that they have until May 5, 2025, to move the court to serve as lead plaintiff in the ongoing action. The Law Offices of Frank R. Cruz are actively encouraging affected individuals to participate and seek potential recovery of their losses.

3. Conclusion

As the allegations against AppLovin unfold, the company now faces serious legal challenges that could have long-lasting implications for its reputation and financial stability. The upcoming court proceedings will likely draw significant attention from investors, analysts, and the media as they seek to understand the full extent of the claims and the potential consequences for the company and its stakeholders.

Original press release