Snap Inc. Faces Class Action Lawsuit Over Securities Fraud

Strategic Insights -

Snap Inc. has been hit with a class action securities lawsuit alleging that the company and its executives provided false and misleading statements to investors about the company's advertising revenue growth rate. The lawsuit claims that Snap's statements were designed to pump up the stock price, while the company was actually experiencing a significant decline in revenue growth. As a result, investors who bought Snap stock during the relevant time period may be entitled to a recovery of their losses.

Key Takeaways:

  • Snap Inc. is facing a class action lawsuit alleging securities fraud between April 29, 2025, and August 5, 2025.
  • The lawsuit claims that Snap and its executives provided false and misleading statements about the company's advertising revenue growth rate, while actually experiencing a decline from 9% in the first quarter to 1% in April.
  • The company attributed the slowdown in revenue growth to issues with its ad platform, Ramadan, and de minimis changes, but investors were not informed of these problems until August 5, 2025, when Snap announced its financial results for the second quarter of fiscal 2025.
  • Following this news, the price of Snap's common stock declined dramatically, falling 17.15% in the span of just a single day from $9.39 per share on August 5, 2025, to $7.78 per share on August 6, 2025.
  • Snap Inc. had previously touted its strong advertising revenue growth, but the lawsuit claims that this was all part of a scheme to inflate the stock price and deceive investors.
  • The lawsuit seeks to recover losses for shareholders who were adversely affected by Snap's alleged securities fraud.

Statistics:

  • The lawsuit covers the period from April 29, 2025, to August 5, 2025.
  • During this time, Snap's advertising revenue grew at a rate of 9% in the first quarter, but decreased to 1% in April.
  • On August 5, 2025, Snap's stock price closed at $9.39 per share, but fell to $7.78 per share the following day, a decline of 17.15%.
  • The lawsuit alleges that Snap and its executives provided false and misleading statements to investors on at least 10 separate occasions during the relevant time period.
  • The class action lawsuit is being led by Joseph E. Levi, Esq. of Levi & Korsinsky LLP, who have extensive expertise representing investors in complex securities litigation.

Sources:

  • Press release by Newsfile Corp. on August 25, 2025
  • [https://zlk.com/pslra-1/snap-inc-lawsuit-submission-form-2?prid=163426&wire=5&utm_campaign=6](https://zlk.com/pslra-1/snap-inc-lawsuit-submission-form-2?prid=163426&wire=5&utm_campaign=6)
  • Levi & Korsinsky LLP website: [https://zlk.com/](https://zlk.com/)