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WATCH: Unsealed lawsuit puts Snapchat CEO in eye of PR storm
IN what must be a relief for Uber after weeks of PR crisis after PR crisis, Snapchat is now in the middle of a “he said, she said” row. An unsealed lawsuit had revealed CEO Evan Spiegel allegedly saying the ephemeral photo and video app was “only for rich people”.
Former employee Anthony Pompliano accused Spiegel of making the remarks during a meeting to discuss Snapchat’s user growth two years ago. Pompliano alleges Spiegel had said: “The app is only for rich people. I don’t want to expand into poor countries like India and Spain.”
Snap Inc. – Snapchat’s parent company – initially argued against unsealing the lawsuit by saying it contained trade secrets, but then withdrew its effort because it had “nothing to hide”. The company described Pompliano as a “disgruntled employee fired for poor performance”, reported Variety.
The company has, of course, denied the remarks, but that hasn’t stopped the backlash. Along with numerous online protests – including a #BoycottSnapchat hashtag that started trending on both Twitter and Facebook – Snap’s shares dropped 1.5 percent earlier this week, putting it on track to close at its lowest level in nearly a month.
That would have been bad news for Snap, especially as it only just went public last month at US$3.4 billion, making it one of the biggest tech IPOs since Alibaba in 2014. However, its shares have recovered since Monday.