$809.5M Settlement in Twitter Lawsuit Alleging It Was Dishonest About User Engagement

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Twitter Lawsuit Settlement Overview: 

• Who: Twitter reached a $809.5 million class action settlement agreement with investors. 
• Why: Shareholders claimed Twitter attempted to conceal a decline in user engagement by not reporting timeline views and issuing vague descriptions of how its user metrics worked.
• Where: The Twitter lawsuit is pending in California federal court.

Twitter has agreed to an $809.5 million settlement with shareholders who alleged in a class action lawsuit that the company misled them about how often people were using the platform. 

Investors filed a class action lawsuit in 2016 claiming Twitter artificially inflated its stock price by being dishonest about the amount of user engagement it had on a daily and monthly basis.

Shareholders alleged Twitter stopped reporting timeline views in 2014 and attempted to conceal lagging user engagement by issuing vague descriptions in regard to user metrics. 

Twitter Lawsuit Settlement Agreement 

Twitter, along with its former Chief Executive Officer Richard Costolo and former Chief Financial Officer Anthony Noto, have, in agreeing to the settlement, denied any wrongdoing, Reuters reports. 

Twitter said it expects to pay the class action settlement in the fourth quarter of this year with cash it has on hand, and expects to record a charge for the settlement during the third quarter. 

The class action lawsuit had been preparing to go to trial but was postponed last week by a federal judge until November, Reuters reports. The judge must now sign off on the settlement agreement.

In July, an anti-LGBTQ pastor was disallowed from filing an amicus brief in support of former president Donald Trump’s lawsuit that alleged Twitter censored him. 

Did you invest in Twitter? What do you think of the class action settlement? Let us know in the comments! 

The plaintiffs are represented by Robbins Geller Rudman & Dowd LLP and Motley Rice LLC. 

The Twitter Investor Class Action Lawsuit is In re: Twitter Inc. Securities Litigation, Case No. 3:16-cv-05314, in the U.S. District Court for the Northern District of California. 

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