Stocks: Snap Divulges Federal Probe; Eventbrite Sees Revenue Soar

Stocks: Snap Divulges Federal Probe; Eventbrite Sees Revenue Soar

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NEW YORK (CelebrityAccess) Snapchat parent company Snap saw its stock drop in pre-market trading today after divulging that regulators at the Department of Justice and the Securities and Exchange Commission are investigating whether it misled investors before the launch of its IPO last year. Meanwhile, Eventbrite’s first earnings call as a publicly traded company has been said to sound like “business as usual” as its September IPO was called a success.

Snap stock has dropped more than 50 percent this year and it dropped another 6 percent in pre-market trading this morning, according to Deadline Hollywood. Its IPO launched at $24.48 last March and is currently at $6.52.

A group of investors recently filed a federal class-action lawsuit claiming the company downplayed the impact of Instagram.

“It is our understanding that these regulators are investigating issues related to the previously disclosed allegations asserted in the class action about our IPO disclosures,” the company said in a statement. “While we do not have complete visibility into these investigations, our understanding is that the DOJ is likely focused on IPO disclosures relating to competition from Instagram.”

The announcement comes shortly after content chief Nick Bell, who developed Snapchat Discover, announced he is leaving the company. The company has reported a daily active user decone to 186 million.

Meanwhile, ticketing company Eventbrite held its first earnings call, which was well-received. Although the company’s operating expenses were $55.2 million for the quarter with increased administrative costs related to the IPO, and the company is burdened by the costs of acquisitions including that of Ticketfly, shares soared at the launch.

“We have gone to market as of last week with a product that is tailor-made for and music venues and promoters and music festivals,” said Julia Hartz, CEO of Eventbrite. “This applies to not just those using Eventbrite but the legacy Ticketfly product. Where we see the great value is that we’ve been able to… bring together a product offering specifically for venues. We’ve also coupled that with our launch with YouTube. We interact with these distribution partners to put the right event in front of the right consumer at the right time… this is very valuable for our music customers.”

“It will be interesting to see how Eventbrite evolves as it finishes various integration projects that are still in process; will the ticketing service continue to operate by acquiring internationally with only incremental improvements to its digital platform, or invest in new tools and capabilities with an eye on the future?” Skift asked.

Meanwhile, Square, which owns a small stake in EB stock, disclosed in a public filing last week that its $25 million investment in Eventbrite last year has more than doubled in value to $61.9 million.


 

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