Twitter proposes a $809 million settlement to end a Securities Exchange Act lawsuit

Cal Jeffrey

Posts: 3,215   +883
Staff member
In brief: Twitter has submitted a settlement proposal to federal court to close a lawsuit alleging that it misled investors in 2014. The settlement amount is just shy of a billion dollars, with Twitter to payout the money with "cash on hand." The company states that the agreement does not count as an admission of wrongdoing.

On Monday, Twitter issued a press release stating that it would settle a 2016 class-action lawsuit for $809.6 million. The suit alleged that the company had misled investors in 2014 about its growth and monthly active user (MAU) count in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.

The complaint contends that Twitter provided "unrealistic" growth projections during "Analyst Day" in 2014. The company claimed that it expected to double the MAU count to 550 million by 2018 and that revenues would climb to $4.6 billion in the same time frame. Twitter then proceeded to play a "shell game" with investors by changing its MAU metrics and padding growth numbers through "low-quality growth" metrics.

Specifically, Twitter stopped using its "timeline views." Timeline views made it easy for investors to track MAU growth. In 2016, Vanity Fair said the company also allegedly started inflating user counts by sending out automated emails to long inactive accounts to get them to log in so it could count them in its MAU metrics.

Twitter denies any wrongdoing but wants to settle the matter out-of-court. Its proposed $800+ million settlement would be recorded in its Q3 2021 financial statement, with payments using "cash on hand" going out in Q4. However, the proposal still has to be approved by the United States District Court for the Northern District of California.

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JamesBlond

Posts: 152   +99
Damit, they needed to make it 3 trillion so they could close down, then go for Facebook and close them down, fake social media sites