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Snap Shareholders Can Pursue Claims IPO Hid Crucial Facts (1)

June 8, 2018, 8:48 PM

Investors who claim they were deceived when Snapchat went public last year will get a chance to pursue damages in court.

Snap Inc., the maker of an application for ephemeral messages and videos, lost its bid to dismiss a securities lawsuit stemming from its initial public offering in March 2017. The next step for shareholders is to request class-action status, which would give them additional leverage to negotiate a settlement.

The investors allege that prior to the IPO, Snap didn’t reveal how much competition from Instagram, the photo-sharing app, was hurting its growth in the second half of 2016. They ...