Twitter will pay more than $800 million for a lawsuit filed five years ago.
Twtter announced Monday that it agreed to pay $809.5 million to settle a class-action lawsuit filed by its shareholders in 2016. The plaintiffs accused Twitter, along with executives such as former CEO Dick Costolo and co-founder and current CEO Jack Dorsey, of deliberately misleading investors about user engagement in 2015, covering up slow growth and making hundreds of billions of dollars from insiders selling the company's stock.
Specifically, plaintiffs accused Twitter of using daily users (DAUs) as a key indicator of user engagement in early 2015, but still publishing monthly live user data in its earnings reports. At the time, the DAU showed that Twitter's user engagement had declined, or was flat, and had not grown.
Twitter began publishing average monetized daily users (mDAU) in its fourth-quarter 2018 results as the only indicator of user engagement disclosed to investors, which more accurately reflects how the company makes money through users.
Twitter, which did not admit any wrongdoing or negligence in its filings monday, continues to deny the allegations but is willing to pay a settlement and plans to pay in cash by the end of the year.
Since the settlement has not yet been approved by the court, Twitter's follow-up settlement is subject to court approval, and it is expected to pay for the third quarter.
On Monday, Twitter shares followed the broader U.S. market, falling more than 4 percent to close down 2.5 percent.