Snapchat chief executive officer Evan Spiegel and CTO Bobby Murphy have reached an undisclosed settlement with bounced early partner Reggie Brown, the company has announced in a statement.
In a stealthy public relations move, the news was revealed on Tuesday as all eyes were on Apple's event announcing the iPhone6 and other new products following a Snapchat dispute that went on for months.
Brown claims to have come up with the original idea for the disappearing message app, originally called Peekaboo, while a student at Stanford, only to be shut out of the company launch. He originally sought up to one-third of the company in December, shortly following Snapchat's rebuff of Facebook's $3 billion buyout offer. Spiegel and Murphy currently own an estimated 15 percent stake in the company, which was recently valuated at $10 billion.
While the terms of the settlement are confidential, Forbes has speculated that "it seems likely that Brown will walk away with much less than an equal share," and it's unlikely anyone would dispute that.
Snapchat's press release is carefully worded, acknowledging that Brown "originally came up with the idea of creating an application for sending disappearing picture messages while he was a student at Stanford University" before collaborating "with Spiegel and Murphy on the development of Snapchat during its early and most formative days." It's worth noting that the release avoids using the term "co-founder" in referring to Brown's early involvement with Snapchat.
"We are pleased that we have been able to resolve this matter in a manner that is satisfactory to Mr. Brown and the Company," Spiegel said in the press release. "We acknowledge Reggie’s contribution to the creation of Snapchat and appreciate his work in getting the application off the ground."
With Brown's lawsuit out of the way, Spiegel and Murphy's stakes in the company are now secured, clearing the way for future expansion and attempts to monetize as the company courts advertisers and publishers with Snapchat Discovery.