Twitter To Pay Over $800 Million To Settle 2016 Class Action Lawsuit
On Monday, Twitter said it would pay $809.5 million to settle a shareholder class action lawsuit that accuses the social media giant of deceiving investors about how frequently people used its platform.
The settlement resolves a case that had been close to heading to trial, with jury selection scheduled to begin on Monday. However, at a September 17 hearing in California, US District Judge Jon Tigar postponed it until November.
The social media platform’s former CEO Richard Costolo and former COO Antony Noto denied wrongdoing in agreeing to settle.
The shareholder’s representative, Tor Gronborg, said: “The jury trial is a great equalizer, even for some of the most powerful entities on the planet.”
Shareholders sued Twitter in 2016, claiming that it had artificially inflated its stock price by deceiving them about user engagement. According to the complaint, the social media platform stopped reporting “timeline views” in 2014 and hid stagnating or declining user engagement.
Following news of the settlement, in early afternoon trading, Twitter shares were down by 3.8%. The social media platform said it expects to use cash on hand to pay off the settlement fee in the fourth quarter of this year.