Snap Stock Drops 12% After Court Ruling Opens Door to Thousands of Lawsuits
TLDR
- Snap stock fell 12.4% in pre-market trading to $4.74, down from $5.41
- A 9th U.S. Circuit Court ruling stripped Section 230 immunity, letting 3,000+ lawsuits proceed
- CTO Robert Murphy sold 4 million Class A for $21.6 million on August 5 and 6
- Q2 earnings beat expectations with $1.60 billion in revenue, up 19% year-over-year
- Analysts at Truist and Bank of America trimmed price targets, keeping Hold/Neutral ratings
Snap (SNAP) stock dropped 12.4% in pre-market trading Monday, hitting $4.74. That puts it well below its previous close of $5.41 and closer to the bottom of its 52-week range of $3.81 to $9.28.
Three things hit the stock at once: a major court ruling, a large insider sale, and a Wall Street that remains unconvinced.
On August 10, the 9th U.S. Circuit Court of Appeals denied Snap and other social media platforms the Section 230 legal protection they were counting on. That decision clears the path for more than 3,000 lawsuits to move forward.
Those cases were filed by states, municipalities, school districts, and families. They allege Snapchat was deliberately built to maximize engagement among minors.
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