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>> After salty Snap investors slapped the company with a lawsuit, US authorities are now investigating their complaints. In a move first reported by Reuters, Snap said the justice department and securities and exchange commission are looking into whether it misled investors ahead of its 2017 IPO. The shareholders allege in a lawsuit that before it headed to the public market, Snap played down how much of a threat Instagram was to its growth.
And while precise details are not yet clear, Snap told Reuters that regulators are likely looking into IPO disclosures relating to the company's competition from Instagram. The escalation of Snap's legal issues another headache for CEO Evan Spiegel whose company is losing users and facing a slumping share price. One of the factors contributing to that is, in fact, Instagram, which rolled out a feature called stories that mimics the chore of Snap’s user experience.
And it has 400 million users, more than double the amount Snap has. Yet the company describe the lawsuits as meritless, and said what it revealed before it went public was accurate and complete. However, it also said it would cooperate with the SEC and DOJ on the probes.