Snap Inc., fresh off of a very strong IPO, has fallen under fire from a former employee, Anthony Pompliano, who is fighting to have his allegations that the company has hidden and manipulated critical user metrics unsealed and a public court case made of them. The case had been in private arbitration, and when the employee tried to escalate things to a public court, Snap executives gave the order to postpone trial, seal the record of the allegations, and relegate the case back to private arbitration. Pompliano and his lawyer are not having it; they have officially opposed the motion to seal the records, and are planning to put out a fresh public filing of their lawsuit and its related documents in a Los Angeles courtroom.
According to the former Snap staffer, the company inflated numbers, fabricated statistics, and even manipulated investors to make themselves look better off than they actually were, building up a false valuation. This stellar valuation is what brought them such a powerful IPO, and according to Pompliano, the whole thing is "built on a house of cards". He claims that he brought up these concerns only three weeks after being filched from Facebook to become their head of growth, and was unceremoniously fired "under false pretenses" shortly after that. Since then, he has filed a lawsuit against the company with the goal of bringing his allegations to the public and having Snap's numbers independently verified.
Snap, for their part, has held the position from the beginning that Pompliano's claims are without any merit, and would fall apart under scrutiny; the mere ravings of a jilted former employee. While they are maintaining that Pompliano's allegations are baseless, they have stated that they will review those allegations themselves. The case will likely end up in a formal trial soon, should Snap's motion to seal the records be overturned, and that alone may hurt their stock prices, even if Pompliano comes out of the courtroom with egg on his face in the end. Should his allegations be proven true, however, it could cause untold damage to Snap's reputation, valuation, and bottom line.