Snap Sued By Shareholder
Venice-based Snap Inc., the company behind messaging app Snapchat, has been struggling since filing its initial public offering.
The company's stock fell more than 23% at one point earlier in May.
Now Snap shareholder James Erickson of Suffolk County, New York, has filed a lawsuit in U.S. District Court in LA, saying Snap misrepresented its number of users and blamed this for the stock drop, the LA Times reports.
Erickson is seeking unspecified damages and a possible class-action designation.
Snap had reported it had 100 million users, but company data later showed it had a few million less, alleges an ex-employee of Snap, Anthony Pompliano. Pompliano has filed lawsuits in state and federal court stating the tools Snap used to measure users were not accurate.
Snap said lawsuits like Erickson's are not unusual and is not giving any merit to the claims. The company's stock closed down at $19.90 on Wednesday, below its IPO opening price of $24/share.
