Adtech giant Applovin is reportedly under multiple investigations for its business practices

Applovin (APP) surged nearly 300% over the last 12 months as Wall Street remains bullish on the adtech company’s explosive growth.

However, this growth has reportedly come at the expense of swirling allegations about its handling of consumer data and other controversial business practices.

Thus far, the allegations and controversies have done little to dent Wall Street’s outlook for the company, even if they seem to keep piling up.

The latest news came on Sunday when the New York Post reported that Applovin is under investigation by multiple state regulators in the United States, including attorneys general in Delaware, Oregon and Connecticut.

The probe, which reportedly began in March, is focused on the Silicon Valley company’s data collection practices, according to the Post.

Regulators have been in contact with “multiple short sellers” as part of their investigation, while several third-party data brokers that have worked with Applovin have received subpoenas, the Post reported.

A spokesperson for the company told the Post in a statement that it has “not engaged in any investigations with any state attorneys general regarding its business” and that it has also not been “contacted by any state attorneys general regarding any such alleged investigation.”

Bloomberg reported earlier this month that the Securities and Exchange Commission has launched its own investigation into Applovin over allegations that the company had violated platform partners’ service agreements by pushing targeted advertising to consumers on the platform.

According to Bloomberg, the SEC launched its investigation in response to both a whistleblower complaint filed against Applovin, as well as several short-seller reports that have been published against the company this year.

Applovin shutters product at the center of allegations

Prominent short sellers Fuzzy Panda, Muddy Waters and Culper Research have all written short reports this year, accusing Applovin of various fraudulent advertising schemes.

Fuzzy Panda called APP's AXON 2.0 technology "the nexus of a House of Cards" in its report.

"We believe AppLovin has pulled every trick in the book," the firm wrote. "We've been told they are stealing data from Meta in their e-commerce push. We also discovered AppLovin exploiting consumers and their data in ways which are clear violations of Google and Apple's app store policies."

Applovin CEO Adam Foroughi responded in a blog post, accusing “a few nefarious short-sellers” of “making false and misleading claims aimed at undermining our success.

In his view, they are driving down our stock price for their own financial gain, rather than acknowledging the sophisticated AI models our team has built to enhance advertising for our partners.”

Ben Edelman, a researcher and former chief economist at Microsoft who holds a short position on Applovin, accused the company in a report earlier this month of placing apps on users’ Android phones without their consent, claiming to have found the source code that forced these downloads.

Edelman collected 208 complaints by users who said that apps had been uploaded on their phones even though they had never downloaded them.

Applovin is alleged to have facilitated the downloads onto users’ phones through a mobile software product called Array, which the company shut down last week.

A spokesperson for Applovin told Bloomberg that Array was a "test product” and that the company decided to shutter it because it was “not economically viable for us.”

Applovin’s stock fell 4.5% on Monday, following the New York Post’s report about the ongoing investigations.