Snapchat has moved to refute claims that it has misled investors about its user numbers ahead of its IPO, after a disgruntled former employer filed a lawsuit against the social firm in Los Angeles.
Documents filed with Los Angeles Superior Court by former staffer Anthony Pompliano could derail the company's US$25 billion IPO as it tries to woo investors.
The suit claims Snapchat “falsely misrepresented” growth metrics to inflate its valuation ahead of its IPO and during his recruitment process. It then terminated his contract when he wouldn't go along with the claims after joining the company.
The metrics are concealed in the Los Angeles Court documents which are available for access online.
AdNews has contacted Snapchat for a response but the comment, attributed to a Snap Inc spokesperson, being widely distributed to other media over the weekend reads: “We've reviewed the complaint. It has no merit. It is totally made up by a disgruntled former employee.”
The suit will be a bump in the road for social media's current golden child.
Although Snapchat's advertising metrics are not in question in the lawsuit, the reliability of social media platforms' metrics has been a hot topic in recent months and it is likely to raise concerns with advertisers as well as investors. Snapchat has been keeping itself removed from the furore of unreliable measurement and figures that has embroiled Facebook for the last six months.
Last week Snapchat revealed an additional partnership with Moat to offer advertisers greater third party measurement capabilities.
Snapchat revealed its Australian user numbers for the first time back in November, claiming four million active daily users in Australia. The data also showed the Australian demographic split, with its largest audience aged 18-24 (31%), followed by 25-34-year-olds (28%), 13-17 (23%) and 35+ (18%).
Snapchat filed its IPO, which values it at around US$25 billion, back in October. It's speculated to be one of the largest tech IPOs since Twitter in 2013.
Ever since Twitter made its debut on the stock market it has been plagued with headlines around its stalling growth, disappointing performance and falling value.
Pompliano's LinkedIn page states he worked at Snapchat for an unspecified period of time after spending 19 months as a product manager for Facebook.
Six months ago he set up a venture capital firm called Full Tilt Capital.
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