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Kessler Topaz Meltzer & Check, LLP: Investor Class Action Filed Against Snap Inc. for Securities Fraud Violations

Notice is hereby given that 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 Snap’s 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 Wilson’s 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. 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 info@ktmc.com.


Kessler Topaz has been actively prosecuting Snap investors’ claims for more than one year in preparation for trial, previously scheduled for March 2019.  Kessler Topaz’s 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;

  • 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 Topaz’s complaint, sustained by the Court, have spurred SEC and DOJ investigations into Snap’s representations to investors in its IPO documents.  As a result of the current Lead Plaintiff’s 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 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 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 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.

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation.  In order to be appointed 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, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at info@ktmc.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.

CONTACT:
Kessler Topaz Meltzer & Check, LLP
James Maro, Esq. or Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
1-888-299-7706 (toll free) or 1-610-667-7706
Or by e-mail at info@ktmc.com

Please complete this form relating to your transactions for Snap, Inc. (NYSE:  SNAP) securities between March 2, 2017 and August 10, 2017, inclusive (the “Class Period”).

Once completed, please click the orange “Submit Your Information” button at the bottom of this page. You may also contact James Maro, Jr., Esq. or Adrienne Bell, Esq. at 610.667.7706 or toll free at 888.299.7706, or you may submit your information via email at info@ktmc.com.

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# of Shares
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Series or CUSIP
 
 
 
# of Contracts
Price per Contract
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The submission of this form does not create an attorney-client relationship, nor an obligation on the part of Kessler Topaz or you to file a lead plaintiff motion in this matter. Any information you submit will be maintained as confidential. If Kessler Topaz, in its sole discretion, believes that you might be an appropriate lead plaintiff candidate, Kessler Topaz will contact you to discuss the matter and whether to establish an attorney client relationship. By signing this form you are authorizing us to contact you regarding this case and/or future cases.
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