Even 18 months later, Snap’s IPO remains a never-ending headache. The company is now dealing with a subpoena from the DOJ and SEC over whether it made proper disclosures in its IPO filing, according to this scoop from Reuters. The inquiry relates to a class-action lawsuit that alleges Snap was not forthcoming about its competition from Facebook and the adverse effects it might have on growth.
It’s hard to imagine this inquiry developing into a larger legal action. Snap did say quite plainly in its IPO filing that competition from Facebook was a risk factor. Any careful examination of Snap’s publicly disclosed user growth numbers reveals that it was experiencing a slowdown. But the fact that federal agencies are looking through Snap’s financials is, if nothing else, another burden for the company to bear as it tries to turn around its narrative.