Twitter announced Monday that it would pay $ 809.5 million to settle a consolidated class action lawsuit alleging the company had misled investors about the growth of its user base and the number of users interacting with its platform. form.
SAN FRANCISCO – Twitter said on Monday it would pay $ 809.5 million to settle a consolidated class action lawsuit alleging the company misled investors about the growth of its user base and the number of interacting users with its platform.
The San Francisco-based company said the proposed settlement, which has yet to be approved by a judge, resolves all claims against it without Twitter admitting to any wrongdoing. The initial lawsuit filed in 2016 by Twitter investor Doris Shenwick claimed that Twitter executives “knowingly made inaccurate public statements regarding these measures and did not disclose inside information about them, resulting in a rising share price which fell when the truth about user engagement became known. . “
The company said it plans to use cash on hand to pay the settlement in the fourth quarter of 2021. It expects to record a one-time charge as a result.
According to the lawsuit, in 2014, Twitter executives said the site’s average monthly user base is expected to increase dramatically to “over 550 million” in the medium term and “over 1 billion” in the longer term.
In 2019, Twitter stopped posting monthly user figures. At the last count this spring, that number was 330 million. Now Twitter only reports daily user figures.
And in 2017, Twitter said it overestimated its monthly user count by mistake because it included users from a third-party app that it shouldn’t have had.
Shares of Twitter Inc. fell $ 2.50, or 4%, to $ 59.95 in afternoon trading.
