Snap Shares Tumble 8% Amid Class-Action Fraud Allegations

Shares of Snap Inc. (NYSE: SNAP) plunged 8.09% in heavy trading after news surfaced that a class-action lawsuit has been filed against the company, alleging securities fraud and false statements. The significant sell-off saw trading volume swell to 266 million shares, nearly double its daily average, as investors reacted to the legal challenge.

The lawsuit, announced by the law firm of Levi & Korsinsky, centers on claims that Snap made to investors, concealing critical adverse facts about the company's financial health. Specifically, the complaint alleges that Snap failed to disclose a severe deceleration in its advertising revenue growth rate earlier in the year.

According to the legal filing, Snap's management projected confidence while its ad revenue growth was allegedly plummeting from 9% in the first quarter of 2025 to just 1% in April. The firm attributes this slowdown to internal execution failures, a stark contrast to the company's public statements. The full impact of this slowdown was revealed on August 5, 2025, when Snap's second-quarter financial results were released. The day after the announcement, , a devastating blow to shareholders.

The current lawsuit invites investors who purchased Snap shares between April 29, 2025, and August 5, 2025, to join the legal action. during this period have until October 20, 2025, to file a motion to serve as lead plaintiff in the case.

This legal battle introduces a significant headwind for Snap, creating uncertainty and damaging investor confidence. The allegations of concealing poor performance could lead to substantial legal costs and potential damages, casting a shadow over the company's stock as it navigates the proceedings. The case highlights the potential fallout when corporate communications and financial realities diverge, leaving shareholders to bear the cost.