Twitter to pay $809.5M to settle 2016 lawsuit over growth projections
The social network has changed a lot since 2016.
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Twitter on Monday said it has agreed to pay $809.5 million to settle a class action lawsuit that accused the social network of violating securities laws by misleading investors about its prospects for growth.
The settlement stems from a 2016 lawsuit that alleged Twitter and its executives misled shareholders in November 2014 about user growth, promising an increase in monthly active users to 550 million in the "intermediate" term and more than a billion "over the longer term." But Twitter's user growth remained flat, causing steep declines in its stock price, according to the lawsuit.
Twitter stopped reporting monthly active users in April 2019 (at last count it reported 330 million). The company now looks at daily users who see ads as its key metric. In July, Twitter reported that its mDAU, or monetized daily active users, grew to 206 million for the quarter that ended in June. The user growth helped the company, which makes most of its revenue from ads, post a 74% increase in quarterly revenue, to $1.19 billion.
The settlement agreement, which doesn't include any admission of wrongdoing by Twitter, is subject to court approval.