Two major firms grapple with SEC probes and plunging stock prices
Two major firms grapple with SEC probes and plunging stock prices
Two major firms grapple with SEC probes and plunging stock prices
A major pharmaceutical firm is facing mounting challenges as its stock price continues to fall sharply. Since January, shares have dropped nearly 53%, now trading at around $13.50—just above a 52-week low. The decline follows an SEC investigation into its weight-loss division, a key driver of recent growth.
Another tech-focused company, AppLovin, has also seen steep losses, with shares plunging about 38% since the start of 2026. The drop comes amid regulatory scrutiny and broader market uncertainty.
The U.S. Securities and Exchange Commission (SEC) has requested documents related to the company's public statements about its compounded semaglutide products. This weight-loss division has been a major revenue source, but the investigation has raised concerns among investors. As a result, Citigroup and BTIG have downgraded the stock, citing slowing growth and increasing regulatory risks.
The company recently projected first-quarter revenue of $600–625 million, below analysts' expectations of roughly $654 million. Despite this, it announced a $1.15 billion acquisition of the health platform Eucalyptus, aiming to expand into Germany, the UK, Australia, and Japan.
Meanwhile, AppLovin's stock has fallen from nearly $746 in September 2025 to around $323 in late February 2026. The decline follows an SEC probe into its advertising practices, which caused a 9–10% drop in a single day. Strong fourth-quarter results—with revenue up 66% to $1.66 billion—have done little to offset the sell-off. Additional pressures include tense sentiment in the AI sector, unconfirmed OpenAI partnership rumours, and risks tied to its expansion into social platforms and e-commerce.
Both companies now face heightened volatility as regulatory and market challenges persist.
The pharmaceutical firm's stock remains under pressure, with the SEC investigation and lower-than-expected revenue guidance weighing on investor confidence. Its recent acquisition of Eucalyptus signals a push into new markets, but regulatory risks linger. For AppLovin, the sharp decline reflects broader sector concerns and ongoing scrutiny, despite strong earnings. Both will need to navigate these hurdles to stabilise their share prices.