Snap Inc. Hit With Lawsuit Over Ad Platform Allegations
Investors allege the social media company made misleading statements regarding its advertising revenue and growth prospects, prompting a stock decline.
Snap Inc. (NYSE: SNAP) is facing a significant legal challenge after a securities class-action lawsuit was filed against the company and its senior executives. The lawsuit, brought by law firm Hagens Berman, alleges the social media giant misled investors about the performance and growth prospects of its digital advertising platform. Following the news, Snap's stock traded down approximately 1.35% as investors reacted to the allegations.
The core of the complaint centers on a period between April 29, 2025, and August 5, 2025. During this time, were made, creating a false impression of the company's advertising revenue and growth trajectory. The suit claims that while Snap publicly touted the benefits of its ad platform improvements, it was privately aware of a significant 'execution error' that was adversely affecting its growth.
According to the legal filings, the truth emerged on August 5, 2025, when Snap announced its . The revelation of weaker-than-expected performance led to a sharp 17% decline in the company's share price on the following trading day, causing substantial losses for investors who had bought into the company's optimistic guidance.
The seeks to recover damages for investors who purchased Snap securities during the class period. Hagens Berman has stated it is actively investigating whether Snap's management was aware of the ad platform issues earlier and failed to disclose the adverse information to the market in a timely manner. The firm is also encouraging individuals with non-public information to assist in the investigation.