PHILADELPHIA, Jan. 15, 2019 /PRNewswire/ -- Goldman Scarlato & Penny PC investor rights lawyers are evaluating potential claims on behalf of investors of Snap, Inc. after the Company announced that both Securities and Exchange Commission and United States Department of Justice are investigating the disclosures made ahead of its initial public offering (IPO).
Snap, Inc. allegedly made false and materially misleading statements regarding Company's key performance metrics, according to a complaint filed by a former employee in US State District Court for the Central District of California, case no.17-cv-03664. More specifically, the Company allegedly failed to warn its prospective investors about the risks posted by Snap's biggest competitor, Instagram, according to the aforementioned complaint. In addition, Snap, Inc. allegedly misrepresented user growth and engagement figures and made misleading statements regarding its use of "growth hacking" strategies, as stated by the same complaint.
In March 2017, Snap, Inc. completed its IPO by raising $3,9 billion after issuing 200,000,000 shares. Two months later, Snap disclosed its first quarterly report as a public company, reporting disappointing user growth, causing the share price to fall 21%. In July, 2017, Morgan Stanley downgraded its "Buy" position to "equal weight" and lowered its price target by 42% to $16, below the IPO valuation. Finally, after Snap reported its financial results for the second quarter of 2017, company's share price declined to close at $11.83 per share.
In its statement released in October 2018, Snap, Inc. reported fewer daily active users for the second consecutive quarter, and executives expect users to continue to fall in the current quarter.
Goldman Scarlato & Penny lawyers and their co-counsels plan to seek recovery of losses suffered by investors who purchased securities of Snap Inc. as a result of the allegedly false and misleading statements made by the Company ahead of its IPO.
What Snap Investors May Do
Snap investors may have options to seek recovery of their losses. If you invested in Snap, Inc., you should contact the Goldman Scarlato & Penny attorneys Alan Rosca, Paul Scarlato, or Mark Goldman to learn more about your loss recovery options and also to provide any useful information, toll free at 888-998-0530, or via email at firstname.lastname@example.org.
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