Snapchat parent Snap Inc. might be standing at the alter of trouble right around the time of its upcoming public offering. A former worker at the company has filed a lawsuit claiming that Snap Inc. has been advertising inflated growth and performance metrics to lure investors to its IPO.
According to the complaint, Anthony Pompliano, a former Snapchat employee responsible for user growth and engagement has alleged the company unlawfully fired him just three weeks into his tenure for not seeing eye to eye with their manipulated metrics. Filed with the L.A. County Superior Court, this complaint alleges that the company has been “falsely misrepresenting” itself to the public. His court filing reads:
Snapchat will not let anything stand in its way of an IPO, including its obligations to represent material facts accurately
In addition, Pompliano mentions that Snapchat roped him in from Facebook to gain access to confidential information on their rival. He further adds that the company wanted him to go along with their bloated performance metrics to increase investor interest surrounding the millennial-focused chat app. But when he refused and raised concerns about it, he was removed from the company under false pretenses.
The real reason Snapchat hired Mr. Pompliano away from Facebook was not to build a growth team, but for the nefarious purpose of obtaining Facebook’s confidential and proprietary information.
Though much of the information about the falsified metrics has been redacted from the court filing so we’re not exactly aware of what Snap Inc. has been manipulating. In addition, the filing adds that his termination led to the loss of employee stock options and salary but it also resulted in creating a huge blot on his resume.
Further, he alleges that Snapchat has been focused on destroying his career by telling his potential employers — who are hiring for the same role — that he’s incompetent. They’ve also been accused of fabricating false circumstances of his termination to further degrade his worth in the market. Thus, Pompliano is now seeking an injunction and monetary relief in the form of damages for this treatment.
With regard to the same, a Snap Inc. spokesperson has shared the said statement:
We’ve reviewed the complaint. It has no merit. It is totally made up by a disgruntled former employee.
The massive $25 billion initial public offering, which the company has already filed for earlier last year, is expected to go live in March but this lawsuit hanging over its head could surely delay things. Though Snap Inc. is currently raking in money, thanks to the new marketing strategy and bombastic sales of its trendy hardware product — Spectacles. But this feeling of overwhelming success can disappear any second as its social arch-rival Facebook is defacing the app and copying features left and right.
Snapchat’s parent has filed for the IPO because it needed the investment to scale its operations and further expedite its efforts to churn out features as well as products to again differentiate itself in this competitive market. It’s ephemeral messaging and story features are no longer their standalone property. Thus, Snap Inc. needs to settle this lawsuit immediately to avoid investors from suspecting its fate.
