Snapchat: The Beginning of the End?
While the app itself may not be disappearing like its pictures/videos, its stock has definitely taken a turn for the worse. In recent weeks, according to a report by Markets Insider, a disgruntled former Snap employee, named Anthony Pompliano, asked a judge to unseal the allegations he made against Snapchat in a January lawsuit.
Pompliano was originally acquired from Facebook and then fired by Snapchat three weeks later. He says that during his employment, he found out that Snapchat was dishonest in its disclosure of metrics to investors and that the unsealing of court documents will reveal what he found to the public. Business Insider's Alex Heath wrote:
In Pompliano's opposition on Tuesday to Snap, his lawyers argue that "Snap’s outsized valuation is built on a house of cards" that has been "systematically built through a coordinated effort from Snap’s executives to personally reward themselves with billions of dollars by maliciously manipulating metrics, suppressing metrics that put the company in a negative light, and even, at times, blatantly misleading professional investors, employees, advertisers, and now, retail investors."
As a result, the stock remains in negative territory relative to its very optimistic IPO price from a couple months back. This just goes to show you that even if you like a product, and the company issues an IPO, still continue with a sense of skepticism about the company's officers and products. Oddly enough, many Wall Street firms have optimistic ratings on Snapchat, but then again, they did the same thing for Facebook before the stock made a recovery. We shall see how things so for SNAP...it may not have met its demise just yet.