Snap Stock (SNAP) Slips on IPO Probe Wednesday

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Snap stock (NYSE:SNAP) is sliding on Wednesday as the company has received a subpoena from U.S. agencies in regard to its March 2017 initial public offering (IPO) and the information disclosed by the social media app maker.

Snap Stock
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The Snapchat parent company is the subject of a probe that is being conducted by the U.S. Justice Department and Securities and Exchange Commission. The social media app provider said in a statement that it has acknowledged the receipt of these subpoenas and it has responded to these, as well as other requests for information surrounding its IPO.

The federal inquiries are an extension of a shareholder lawsuit that has seen Snap investors claim that the company was not entirely truthful to its investors regarding its growth, which they claim has been negatively impacted from the competition that Instagram has provided it with to a higher degree than what the company led on.

Snap said that federal regulators “are investigating issues related to the previously disclosed allegations asserted in the class action about our IPO disclosures. While we do not have complete visibility into these investigations, our understanding is that the DOJ is likely focused on IPO disclosures relating to competition from Instagram.”

SNAP stock is sliding about 3.4% on Wednesday following the news. Shares fell a further 0.5% after hours.


Article printed from InvestorPlace Media, https://investorplace.com/2018/11/snap-stock-snap/.

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