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Snapchat Cited False User Numbers in Order To Boost IPO, Alleges Lawsuit by Ex-worker (yahoo.com)
A lawsuit filed against Snap Inc. by a former employee claims the company reported false growth numbers to investors in an effort to inflate its valuation. An anonymous reader shares a report: The plaintiff, Anothony Pompliano, joined the company (then known as Snapchat) as a growth lead in September of last year from Facebook. Pompliano claims the company's "institutional pandemic" of misrepresentation of its user numbers was fueled by its pursuit of a multi-billion dollar initial public offering (IPO) -- a number of prior reports have claimed the company could go public as soon as March. Snap's visual messaging app Snapchat is known for its popularity with younger millennials (aged 25 and under). Despite remaining tight-lipped about its official statistics, leaked reports put its daily active user base at 150 million (higher than that of fellow social platform Twitter). Additionally, its daily video views count hit an impressive 10 billion in April 2016. Numbers like these have had the industry buzzing over its expected IPO, with analysts claiming the company could be valued as high as $25 billion.
"Every internet company is based on lies, kid...lies, lies, lies. Also, never trust a kraut or a jap."
SJW: Someone who has run out of real oppression, and has to fake it.
I was asked to do this in my first job. It's very normal practice for releasing a new site unfortunately. However it's not usually for valuation but to get users on it. However it is a good point that it can influence that.
Q: How do you know a start-up CEO is lying?
A: His lips are moving.
A tech company falsifying account and clickstream data for the purpose of extracting more money from investors and ad buyers?
I'm shocked. Shocked!
Snapchat is dead. Now that Facebook does essentially the same thing, there's no reason for anyone to use Snapchat.
There are three kinds of lies. "Lies", "Damn Lies", and Statistics.
Fake numbers are used so often that I simply assume a provider of any type is lying and half their numbers (at least). In addition to creating bogus (aka "test) accounts and forging numbers, companies today can go to a PR firm overseas and have them create a ton of bogus accounts for you.
Facebook claims to have more accounts than there are people with Internet access in the world, and LinkedIn claims that there are hundreds of thousands of jobs for people with my background in the SF Bay area. Hyperbole without bad intention? Perhaps. Can it cause legal issues if taken literally? Not very often.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
Only a LUDDITE would lie by saying Appchat used LUDDITE numbers. Appchat doesn't use LUDDITE numbers; they only use modern appy app apps!
Apps!
Also, it needs to be asked, "What is the plaintiff's motivation? Do-gooder or axe grinder?
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
I feel like we've been here before. Almost like there's some sort of bubble of ridiculous valuations involving internet companies.
You can't trust user numbers from any major website, even without bringing intentional fraud into the equation. Lots of people have multiple accounts on various services. I don't use Facebook but I know multiple people who use several accounts apiece. On Twitter I have one account with my real identity that's boring and sanitized, another one that my friends know is my "real" account, and a third one I use if I want to post things I wouldn't want my mother to hear. Yahoo had a billion accounts compromised, many millions of those were probably abandoned years ago. Shit, I have 3 or 4 different Slashdot accounts and that's not counting the times I post AC.
Lots of people make throw-away accounts they use one time. And the bots, how many fucking bots are flooding every site worth using? Every time I post something on Twitter, within a minute I have at least one new "follower" that's obviously just a script trawling through the API and "following" every user it finds. There are even spam bots registering and posting here, where I'd like to think most users are anti-spam and aren't going to click on some random testosterone bullshit like I saw last night.
Nobody should be doing valuations based upon number of users or number of accounts.
Pompliano alleges that execs from the firm lied to him about Snapchat's growth numbers (although the company did not have a user growth team in place to track its metrics).
Reminds me of Twitter's recent layoff where they cut 350 people and that was only 8 or 9% of their staff. These companies are ridiculously bloated, it shouldn't take ~3700 people to run Twitter, it sure as hell doesn't take a "user growth team" to track how many people are signing up for Snapchat. For fuck's sake, this is the kind of report one competent data analyst or developer can put together in an afternoon.
Being in the industry I don't like admitting it but it's well past time for another dot-bomb.
Of course, the rubes buying Internet stocks these days only care about "number of users". The idea that a company actually has to earn a *profit* is not even considered by the Trumps buying the stocks.
I don't respond to AC's.
Do Americans now consider suing to be a sport? :)
leaked reports put its daily active user base at 150 million ... with analysts claiming the company could be valued as high as $25 billion
$166/daily active user? That number seems ridiculously high.
Every time you read millennials, replace it by snake people.
This makes the bullshit a bit more funny.