Snap stock falls as alleged CEO comments rile some on social media

Published
12

Shares of Snap fell 1.5 per cent on Monday as the Snapchat owner faced criticism for comments allegedly made by its CEO about not prioritising growth in India and Spain because they were "poor" countries.

The dip put Snap on track to close at its lowest level in nearly a month, a bad sign following its $3.4 billion public listing that was the hottest by a technology company in three years.

Twitter users using the #boycottsnapchat hashtag called for uninstalling the Snapchat app after a legal document unsealed last week alleged that Snap Chief Executive Evan Spiegel in 2015 said he was uninterested in prioritising growth in India and Spain because they were "poor".

The legal document filed in a Los Angeles state court concerns claims made in a lawsuit filed by an employee who left the company in 2015, and Snap has said it considers the litigation to be a publicity stunt.

"This app is only for rich people. I don't want to expand into poor countries like India and Spain," Spiegel is alleged to have said.

"Those words were written by a disgruntled former employee. We are grateful for our Snapchat community in India and around the world," Snap said in a statement.

Snapchat is popular among people under 30 for applying bunny faces and vomiting rainbows onto selfies, but many investors are critical of its slowing user growth. Snap has warned it may never become profitable.

Its stock was down 29 cents at $19.90. Shares of Snap have fallen 26pc from their highest closing price following the public listing, and they remain up 17pc from the company's $17 IPO price.

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