Snap Inc (NYSE: SNAP) Investor Securities Class Action Lawsuit 05/16/2017

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Company Name(s): 
Case Name: 
Snap Shareholder Class Action Lawsuit 05/16/2017
Case Status: 
Lawsuit Filed
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
Class Period Begin: 
Class Period End: 
Court of Filing: 
U.S. District Court for the Central District of California
Deadline To File for Lead: 

September 18, 2017 - Lead plaintiff and lead counsel were appointed and all cases were consolidated.

July 17, 2017 - Lead plaintiff motions were filed.

May 16, 2017 - An investor in shares of Snap Inc (NYSE: SNAP) filed a lawsuit in the U.S. District Court for the Central District of California over alleged violations of Federal Securities Laws by Snap Inc in connection with certain allegedly false and misleading statements made between March 2, 2017 and May 15, 2017.

According to the complaint the plaintiff alleges on behalf of investors, who purchased Snap Inc (NYSE: SNAP) securities or otherwise acquired Snap Inc (NYSE: SNAP) securities pursuant and/or traceable to Snap’s initial public offering on or about March 2, 2017 (the “IPO” or the “Offering”), and/or on the open market between March 2, 2017 and May 15, 2017, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that the defendants made false and/or misleading statements and/or failed to disclose that Snap Inc ’s reported user growth was materially false and misleading, and that as a result, Snap Inc’s public statements were materially false and misleading at all relevant times.

Snap Inc, formerly Snapchat Inc, is a camera company. Snap Inc reported that its annual Total Revenue rose from $58.66 million in 2015 to $404.48 million in 2016 and that its Net Loss increased from $372.89 million in 2015 to $514.64 million in 2016. Snap Inc went public in March 2017 and sold 200 million shares of stock in its initial public stock offering (the "IPO"), raising $3.4 billion in new capital. Snap Inc's stock reached as a high of $29.44 on March 3, 2017.

On May 10, 2017 Snap Inc reported its first quarter 2017 results and revealed a massive quarterly loss of $2.2 billion. Snap Inc realized an enormous amount of stock-based compensation to employees which accounted for nearly $2 billion of that total. However, even after subtracting stock-based compensation, Snap Inc still lost more money than expected in the first quarter. The Company reported an adjusted EBITDA loss of $188.2 million, more than its revenue total and higher than the average analyst estimate of $180.7 million loss. Snap Inc's Q1 revenue was $149.6 million lower than the $158 million analyst consensus estimate.

Shares of Snap Inc (NYSE: SNAP) declined to as low as $17.59 per share on May 11, 2017.

On May 16, 2017, NYSE: SNAP shares closed at $20.78 per share.