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Twitter to pay $809 million to shareholders

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Twitter announced Friday that it will pay $809.5 million to shareholders of the group, some of whom sold shares following the price increase in 2015, because of misinformation from its executives.

twitter to pay $809 million to shareholders

Shareholders who blamed Twitter’s executives for misleading communication will receive $809.5 million from the company

In a legal document filed Monday with the U.S. Securities and Exchange Commission (SEC), the settlement ends a lawsuit filed in a federal court in Oakland (California) by these shareholders.

In the third quarter, there will be a one-time charge related to the settlement, a significant item for a company that generated $1.19 billion in revenue in the second quarter.

The market reacted poorly to the announcement. At 10:45 GMT, Twitter’s share price fell 3.81% to 60.09 dollars.

“Misleading” table
During the publication of the 2014 annual results in early February 2015, the shareholders who filed a federal lawsuit accused the company executives of misrepresenting the state of the company.

In the weeks that followed, several board members, including Jack Dorsey, sold shares at an “artificially inflated” price, according to shareholders.

According to the subpoena filed in November 2016, Twitter executives sold $281 million worth of shares before they disclosed again.

Jack Dorsey sold $3.6 million worth of shares, while Evan Williams, another director of the San Francisco-based group, sold $274 million worth. The latter relinquished his directorship in 2019.

In the following two publications, in April and July 2015, the group revised its forecasts downward and reported a less robust than expected rise in the number of active users, leading to the decline in the share price.

A share price drop of 37% occurred between the end of April and the end of July after these two disappointing publications for the markets.

The settlement ends lawsuits against Twitter as well as against its executives who will not have to admit any guilt or wrongdoing.

For MetaNews.

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