NEW YORK, Jan. 14, 2019 (GLOBE NEWSWIRE) — Labaton Sucharow LLP announces that a class action lawsuit was filed on behalf of a class consisting of investors who purchased or otherwise acquired Snap Inc. (“Snap”) securities (1) between March 2, 2017, and August 10, 2017, inclusive (the “Class Period”); or (2) pursuant and/or traceable to the registration statement and prospectus, issued in connection with the Company’s March 3, 2017 Initial Public Offering (“IPO”) Registration Statement. The lawsuit, captioned In Re Snap Inc. Securities Litigation, No. 2:17-cv-03679 (C.D. Cal.), seeks to recover damages pursuant to violations of the Securities Act of 1933 and the Securities Exchange Act of 1934, as well as SEC Rule 10b-5, promulgated thereunder.
At the direction of the Court, investors wishing to serve as Lead Plaintiff in the securities actions pending against Snap are required to file a motion for appointment as Lead Plaintiff, no later than January 31, 2019.
Snap 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.
The class action filed against Philip Morris and certain of its executives (collectively, “Defendants”), alleges that during the Class Period, Defendants knowingly misrepresented its user engagement metrics and severe internal controls deficiencies, while concealing disappointing growth in user engagement. As would be revealed through a series of disclosures following the IPO, Facebook was eviscerating Snap’s user growth and Snap’s growth had effectively stalled.
On April 4, 2017, it was reported by Business Insider that “[c]urrently redacted portions of former Snap employee Anthony Pompliano’s lawsuit contain user metrics that he claims are different from what Snap told investors and the press ahead of its February IPO.” Following this news, the Company’s stock price fell $1.65 per share, or 7.3 percent, from a close of $22.35 per share on April 3, 2017 to close at $20.70 per share on April 5, 2017.
On May 10, 2017, Snap announced that its Daily Active Users (“DAU”) metric increased only 5% quarter-over-quarter, from 158 million in Q4 2016. Market commentators uniformly attributed Snap’s slowing user growth to direct competition from Instagram. On this news, the Company’s stock price fell $4.93 per share, or roughly 21 percent, from a closing price of $22.98 on May 10, 2017, to close at $18.05 per share on May 11, 2017.
On June 7, 2017, it was reported that based on data from SensorTower, a firm that tracks app analytics, worldwide downloads of Snapchat for the months of April and May 2017 were down 22% from the year prior, confirming that the image of Snap as a rapidly-growing, soon-to-be profitable business was just a mirage. Following this news, the Company’s stock price fell $1.65 per share, or approximately 7.4 percent, from a prior close of $20.36 per share on June 6, 2017 to close at $18.85 per share on June 8, 2017.
On July 11, 2017, Morgan Stanley lowered its price target by 42 percent to $16 and downgraded Snap to equal-weight. The report specifically tied its downgrade of Snap’s stock to the fact that “Instagram competition is increasing.” Following this disclosure, the price of Snap’s common stock fell $1.52 per share, or approximately 8.9 percent, from a closing price of $16.99 on July 10, 2017, to close at $15.47 per share on July 11, 2017.
Then, on August 10, 2017, Snap announced its second quarter results and yet again reported that growth in key user engagement metrics had been stagnant. Specifically, the Company reported that “DAU grew from 143 million in Q2 2016 to 173 million in Q2 2017, an increase of 30.5 million or 21% year-over-year. DAU increased 7.3 million or 4% quarter-over-quarter, from 166 million in Q1 2017.” In response to Snap’s continued disappointing growth in user engagement, Snap’s stock price fell $1.94 per share, or approximately 14 percent, from a closing price of $13.77 on August 10, 2017, to close at $11.83 per share on August 11, 2017.
If you purchased or acquired Snap securities during the Class Period, you are a member of the “Class” and may be able to seek appointment as Lead Plaintiff. Lead Plaintiff motion papers must be filed with the U.S. District Court for the Central District of California no later than January 31, 2019. The Lead Plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as Lead Plaintiff to share in any Class recovery in this action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member. You may retain counsel of your choice to represent you in this action.
If you would like to consider serving as Lead Plaintiff or have any questions about this lawsuit, you may contact Francis P. McConville, Esq. of Labaton Sucharow LLP, at (800) 321-0476, or via email at firstname.lastname@example.org.
For more information about Labaton Sucharow LLP, please visit our website: www.labaton.com.
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