Snap Inc. (SNAP) Misled Investors Regarding the Impact Apple’s Privacy Changes Would Have on its Advertising Business
A class action was filed on behalf of all persons and entities that purchased Snap Inc. (NYSE: SNAP) securities between July 22, 2020 and October 21, 2021, alleging violations of the Securities Exchange Act of 1934. Snap offers Snapchat, a camera application with functionalities that enable people to communicate through short videos and images.
According to the complaint, Snap relies on user data for its advertising business. The complaint alleges that during the relevant period, defendants made false and misleading statements and failed to disclose that: (i) Apple’s privacy changes would have, and were having, a material impact on Snap’s advertising business; (ii) Snap overstated its ability to transition its advertising with Apple’s privacy changes; (iii) Snap knew of, but downplayed, the risks of the impact that Apple’s privacy changes had on Snap’s advertising business; and (iv) Snap overstated its commitment to privacy.
On October 21, 2021, Snap reported its third quarter earnings, disclosing weaker-than-expected revenue and weaker-than-expected guidance because of its advertising business, including due to Apple’s privacy changes. Snap also disclosed the risks of heightened restrictions on Snap’s access and use of user data due to Apple’s privacy update, revealing that “changes have adversely affected our targeting, measurement, and optimization capabilities, and in turn affected our ability to measure the effectiveness of advertisements on our services. This has resulted in, and in the future is likely to continue to result in, reduced demand and pricing for our advertising products and could seriously harm our business.” On this news, Snap’s stock price fell 26%, harming investors.
If you purchased shares of Snap Inc. (SNAP) securities between July 22, 2021 and October 21, 2021, you have until January 10, 2021, to ask the court to appoint you lead plaintiff for the class.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.