Snap Inc. Class A Common Stock (NYSE: SNAP)
According to the law firm press release, Snap Inc. is a camera company that provides technology and social media services. The Company develops mobile camera application products and services that allow users to send and receive photos, drawings, text, and videos. Snap serves customers worldwide.
On or about March 3, 2017, the Company completed its IPO, issuing 200,000,000 shares and raising net proceeds of approximately $3.91 billion.
Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Snap's reported user growth was materially false and misleading; and (ii) as a result, Snap's public statements were materially false and misleading at all relevant times.
On May 10, 2017, post-market, Snap issued its first quarterly report as a public company, disclosing disappointing user growth at the Company's Snapchat messaging platform. For the quarter, Snap reported 166 million daily users, only 8 million more than in the previous period and only 44 million more than the same period in the prior year—Snapchat's slowest year-to-year growth rate in at least two years.
On this news, Snap's share price fell $4.93, or 21.45%, to close at $18.05 on May 11, 2017.
On May 16, 2017, Bloomberg reported that a former Snap employee had filed a lawsuit against Snap, "claim[ing] he was fired after three weeks on the job for raising questions about allegedly false growth metrics [and] seeking whistleblower protection against retaliation by [the] company."
On this news, Snap's share price fell $0.02, or 0.1%, to close at $20.72 on May 16, 2017.
On August 10, 2017, Snap disclosed disappointing Q2 results including ongoing lower-than-expected growth in daily active users (“DAU”), a key user engagement metric. During the earnings conference call, the Company admitted to using “growth hacking” or sending push notifications to users to stoke their access levels, and hence boost user metrics.
On this news, the price of Snap’s shares plummeted $1.94 per share, or approximately 14%.