Twitter has agreed to pay $809.5m to settle a class action lawsuit that alleged the social media site misled investors and shareholders about potential growth in user numbers.
Without admitting wrongdoing or liability, the settlement is set to draw a line under the case that dates back to 2016 and cancelled a court hearing due to begin this week.
The lawsuit claimed Twitter bosses misled investors about the rise in the platform’s users in 2014. This came after it promised an increase in active monthly users to 550 million in the intermediate term, rising to more than one billion in the longer term.
The complaint said these projections had no basis and were not realised. The class action formed after Twitter’s share price fell in 2016 as active user numbers settled at about 330 million per month.
Twitter said it would use cash to pay the settlement, which is expected to be recorded in Q3 2021 results and paid in Q4, subject to court approval.
Twitter and the named defendants deny any wrongdoing or other improper actions under the Securities Exchanges Act.