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Twitter wants to settle for $809.5 million in shareholders’ lawsuit – IT Pro – News

Twitter has proposed a settlement for a 2016 lawsuit alleging that the company shared misleading data about the platform’s growth with investors. Twitter wants to settle for an amount of 809.5 million dollars.

Twitter meldt in a press release that it intends to pay out the proposed settlement with cash available to the company. The California court has yet to approve the settlement. If that happens, Twitter expects to be able to pay the $809.5 million in the fourth quarter of this year.

The lawsuit dates back to 2016 and was filed by a Twitter shareholder. He stated that Twitter co-founder Jack Dorsey and other executives shared misleading data with investors, writes Variety. That data made Twitter user growth appear better than it actually was, according to the indictment. The Twitter executives also allegedly sold insider personal shares for more than $100 million in profit during that period, shareholders claimed.

In the charge It is argued, among other things, that Twitter misled investors about the company’s growth prospects at the end of 2014, also writes The Verge. The company would then have made ‘unrealistic’ growth projections; the company then stated that the number of active users would double to 550 million in the “mid-term” term, with a target of more than a billion active users in the long term. There was no basis for that prognosis, according to the indictment, reports Bloomberg.

Twitter would then have tried to use the actual user engagement from investors, as it was seen as an important growth driver for the number of active users. Among other things, the platform is said to have stopped reporting timeline views, one of the primary measures of engagement. That would have made it harder for analysts and investors to track the platform’s growth. Twitter would have stated at the time that those numbers had become irrelevant. The company also sent messages to inactive users, according to the indictment, encouraging them to log in to the platform in order to increase the number of active users.

The settlement would settle all claims against Twitter. Twitter emphasizes that the settlement is not an admission of guilt. “The proposed settlement resolves all claims against Twitter and the other defendants without any admission, concession or finding of any fault, liability or misconduct by Twitter or any defendant,” the company said. “Twitter and the individual defendants continue to deny misconduct or other improper actions.”

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