The main issue is probably more that Snapchat was doctoring engagement numbers rather than not accurately forecasting and communicating Instagram's effect on the market, which would have been due diligence for investors to conduct (and probably market forecasts/prediction anyways, not historical reported data).

The reason this is coming out now is that large institutional investors that bought in at $17/share at the IPO are now left with $6/share stock are looking for a way to recoup losses from a bad bet. If Snap had gone up, nobody would have cared about the doctored metrics.

Usage metrics have always seemed extremely unreliable/easy to game from my perspective, but if investors can somehow prove Snap was lying about its metrics, they could win back some $$$. Just not sure how they could prove it - Snap is probably the only company that has full visibility into these numbers and I don't think there's a paper/audit trail like there would be for accounting fraud

Here's a summary of how the whistleblower, Anthony Pompliano (not sure if it's the same guy that incessantly shills for bitcoin on twitter), accused Snapchat of doctoring numbers in 2015: https://www.businessinsider.com/snapchat-unseals-anthony-pom...

The investors will probably try to prove that Snapchat continued to do the same shady user engagement reporting through 2017 when Snap IPOd