PHILADELPHIA, Jan. 22, 2019 /PRNewswire/ -- The law firm of McEldrew Young announces a new deadline in a securities fraud class action lawsuit filed against Snap, Inc. (NYSE: SNAP) ("Snap") on behalf of purchasers of Snap securities between March 2, 2017 and August 10, 2017, inclusive (the "Class Period") including those who purchased Snap common stock traceable to the registration statement and prospectus issued in connection with Snap's March 3, 2017 initial public offering. The class action is pending in the United States District Court for the Central District of California before the Honorable Judge Stephen V. Wilson and is captioned In re Snap Inc. Securities Litigation, Case No. 17-cv-03679-SVW-AGR.
Investors who purchased Snap securities during the Class Period may, no later than January 31, 2019, seek to be appointed as a Lead Plaintiff representative of the class. For additional information or to learn how to participate in this litigation please visit: Snapchat Securities Fraud Class Action
Snap is a self-described "camera company" whose primary product is a free mobile chatting application, Snapchat, and it generates revenue by growing user engagement of Snapchat and delivering advertisements to Snapchat users. On March 2, 2017, Snap raised $3.4 billion in its initial public offering ("IPO") by selling 200 million shares at a price of $17.00 each. The complaint alleges that Snap made false and misleading statements and omissions in Snap's IPO offering materials and during the Class Period about: (i) the impact of competition from Instagram, a Facebook subsidiary, on Snap's core business, including Snap's Daily Active Users ("DAU"); (ii) the existence and substance of a lawsuit challenging the metrics by which investors and advertisers valued Snap's platform, and internal control deficiencies at Snap; and (iii) Snap's use of "growth hacking," a technique use to artificially inflate DAU numbers.
The Class Period ends on August 10, 2017, when Snap reported its financial results for the second quarter of 2017, which included DAU growth of only 4% quarter-over-quarter, from 166 million in Q1 2017. This disclosure revealed the relevant truth concealed and/or obscured by Defendants' prior misstatements and omissions, which created the false impression that Snap expected its user growth to continue unabated and that the risk of Instagram's clone features directly competing against Snap was a hypothetical risk rather than a concealed reality. As a direct and proximate result of this corrective disclosure of Defendants' fraud, Snap's share price declined $1.94 per share, or approximately 14%, from a closing price of $13.77 on August 10, 2017, to close at $11.83 per share on August 11, 2017.
Snap investors may, no later than January 31, 2019, seek to be appointed as a Lead Plaintiff representative of the class through McEldrew Young, or other counsel, or may choose to do nothing and remain an absent class member. A Lead Plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a Lead Plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
SOURCE McEldrew Young