Twitter settles the payment of 809.5 million dollars to close the class action initiated in 2016 in the Northern District of California District Court. The social network was accused of having deceived investors in 2015 on the growth of their own user base. The company of San Francisco said the proposed deal – which has yet to be approved by a judge – resolves all requests against it without Twitter admits any wrongdoing.
The original lawsuit filed in 2016 by the Twitter investor Doris Shenwick claimed that Twitter executives “knowingly did inaccurate public statements regarding these metrics and have not disclosed information internal on them, determining an inflated share price, dropped when the truth about user engagement became known ”. Shareholders accused the company of misleading them about the number of monthly active users and on the measure that affects how frequently users interact with the platform.
Under the deal, Twitter will pay $ 809 million for breaching sections of the Securities Exchange Act of 1934, but continues to deny improper actions. The shareholders who initiated the class action five years ago accuse the company of masking it too slow growth, while “they were selling shares for Millions of dollars“.
The company said it plans to use the liquid assets available to pay the agreement in fourth trimester 2021. As a result, it plans to post a one-time charge. According to the allegations, Twitter executives said the site’s average monthly user base should increase significantly to “over 550 million“In the medium term and” over a billion “in the long term. In 2019, Twitter stopped reporting i monthly data of users. At the last count that spring, that number was 330 million. Today Twitter only reports the data of daily users.
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