Twitter to pay $809.5 million to settle shareholder lawsuit
Twitter said Monday it will pay $809.5 million to settle a consolidated class action lawsuit alleging that the company misled investors about how much its user base was growing and how much users interacted with its platform
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Twitter said Monday it will pay $809.5 million to settle a consolidated class action lawsuit alleging that the company misled investors about how much its user base was growing and how much users interacted with its platform.
The San Francisco company said the proposed settlement, which must still be signed off by a judge, resolves all claims against it without Twitter admitting any wrongdoing. The original lawsuit filed in 2016 by Twitter investor Doris Shenwick claimed that Twitter executives “knowingly made inaccurate public statements regarding these metrics, and failed to disclose internal information about them, resulting in an inflated share price that 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 that the site's monthly average user base was expected to increase significantly to “to over 550 million" in the intermediate term and “over a billion" over the longer term.
In 2019, Twitter stopped reporting monthly user figures. At last count that spring, that number was at 330 million. Now, Twitter reports only daily user figures.
And in 2017, Twitter said it had been overstating its monthly user numbers by mistake because it was including users of a third-party app it should not have.
Shares of Twitter Inc. fell $2.50, or 4%, to $59.95 in afternoon trading.