NEW YORK--(BUSINESS WIRE)--Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in Snap, Inc. (“Snap” or the “Company”) (NYSE:SNAP) of the July 17, 2017 deadline to seek the role of lead plaintiff in an expanded federal securities class action that has been filed against the Company.
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The lawsuit expanding the class period has been filed in the U.S. District Court for the Central District of California on behalf of all those who purchased Snap common stock pursuant to the Company’s initial public offering on or about March 2, 2017 (the “IPO”) and/or on the open market between March 2, 2017 and June 6, 2017, both dates inclusive (the “Class Period”). The case, Gupta v. Snap, Inc. et al, No. 2:17-cv-05054, was filed on July 10, 2017. The Class Action seeks to recover damages for alleged violations of Sections 11 and 15 of the Securities Act of 1933, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (i) Snap’s calculations of its user engagement metrics, including Snapchat’s daily active users (“DAUs”), were false and misleading; and (ii) as a result, Snap’s reported growth in user engagement metrics, such as DAU, was overstated and misleadingly described.
Specifically, after market on May 10, 2017, Snap announced its financial results for the first fiscal quarter of 2017. The Company reported, among other things, that its DAU grew by only 5% for the first quarter of 2017 and a net income loss of $2.21 billion.
After the announcement, Snap’s share price fell from $22.98 per share on May 10, 2017 to a closing price of $18.05 on May 11, 2017—a $4.93 or a 21% drop.
Then, on June 7, 2017, Nomura Instinet revealed that worldwide downloads of Snapchat for the months of April and May 2017 were down 22% from the year prior, confirming that Snapchat’s DAU growth was overstated and misleading.
After the announcement, Snap’s share price fell from $20.36 per share on June 6, 2017 to a closing price of $19.56 on June 7, 2017—a $0.80 or a 4% drop.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Snap’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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