The law firm of Kessler Topaz Meltzer & Check, LLP was appointed as Lead Counsel and its client, the Lead Plaintiff, by Court order dated September 17, 2017 in a securities fraud class action lawsuit filed against Snap, Inc. (NYSE:SNAP) (Snap) on behalf of purchasers of Snap securities. The class action, which asserts claims on behalf of investors who purchased 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 Snaps March 3, 2017 initial public offering (IPO), 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.
Pursuant to Judge Wilsons Order described further below, 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, access to the pleadings in the matter, or to learn how to participate in this litigation please visit: www.ktmc.com/snap-inc-securities-class-action.
Kessler Topaz has been actively prosecuting Snap investors claims for more than one year in preparation for trial, previously scheduled for March 2019. Kessler Topazs efforts on behalf of the class have included, among other things:
- investigating and drafting a complaint that withstood Defendants motions to dismiss;
- developing confidential witness testimony supporting the complaint;
- reviewing more than one million pages of documents produced during discovery from Defendants and third parties;
- defeating Defendants efforts to seek interlocutory appellate review of the Courts opinion denying Defendants motions to dismiss and sustaining Plaintiffs claims;
- retaining industry and damages experts and preparing for expert disclosures; and
- preparing for depositions and briefing a motion for class certification.
The allegations in Kessler Topazs complaint, sustained by the Court, have spurred SEC and DOJ investigations into Snaps representations to investors in its IPO documents. As a result of the current Lead Plaintiffs inability to continue to serve as a Lead Plaintiff through trial, on January 10, 2019, Judge Wilson issued an Order reopening the Lead Plaintiff process and thus allowing any investor who purchased Snap securities during the Class Period to seek appointment as a replacement Lead Plaintiff.
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 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 Snaps IPO offering materials and during the Class Period about: (i) the impact of competition from Instagram, a Facebook subsidiary, on Snaps core business, including Snaps Daily Active Users (DAU); (ii) the existence and substance of a lawsuit challenging the metrics by which investors and advertisers valued Snaps platform, and internal control deficiencies at Snap; and (iii) Snaps misrepresentations concerning its now admitted 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 Instagrams 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, Snaps 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 who wish to discuss this securities fraud class action lawsuit and their legal options are encouraged to contact Kessler Topaz Meltzer & Check, LLP (James Maro, Jr., Esq. or Adrienne Bell, Esq.) at (888) 299-7706 or at [email protected].
Investors interested in seeking appointment as Lead Plaintiff may do so through Kessler Topaz Meltzer & Check, 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 members 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.
Kessler Topaz Meltzer & Check prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). For more information about Kessler Topaz Meltzer & Check, please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
280 King of Prussia Road
Radnor, PA 19087