Submitted via IRC for TheMightyBuzzard
Twitter shareholder Doris Shenwick has filed a lawsuit against the social media company. The suit claims that Twitter made misleading statements about its expected growth in order to artificially inflate the value of its stock. The suit is seeking approval for class-action status, which would allow anyone who purchased Twitter stock between February 6, 2015 and July 28, 2015 to join the lawsuit.
In November of 2014, the company stated that the number of monthly active users (MUA [sic]) was expected to grow to 500 million in the intermediate term and to over 1 billion in the long term. In February of 2015, a shareholder report for Q4 of 2014 showed lower growth than expected, which the company attributed to quarter specific factors. However, the report still had a high expectations for future growth and announced several new initiatives to increase its users and their engagement. As a result of this report, Twitter stock rose 17% within 24 hours.
However, in April and July of 2015, Twitter released two disappointment quarterly reports in a row, showing that user growth was basically flat, and expectations for future growth had been significantly lowered. As a result, Twitter stock plummeted.
However, the lawsuit doesn't consider Twitter to be merely mistaken or overoptimistic in its earlier predictions. Instead, the company is accused of making misleading statements to defraud investors. The suit claims that new products and initiatives mentioned in the February report were having no significant effect on user growth, and Twitter executives knew this when they made the report.
Source: https://techraptor.net/content/twitter-sued-by-shareholder-over-growth-predictions
(Score: 0) by Anonymous Coward on Tuesday October 11 2016, @11:20AM
Just like social media users.
(Score: 0, Flamebait) by Anonymous Coward on Tuesday October 11 2016, @11:26AM
My date stood me up, then dumped me! I'm suing for the cost of dinner for an estimated five dates, because I'm a golddigging bitch.
(Score: 1, Insightful) by Anonymous Coward on Tuesday October 11 2016, @11:43AM
In almost all cases like this, projected numbers are based on mathematical fallacy: "infinite growth at X%/qtr forever!".
The same sort of mathematical fraud was prevalent during the dot-bomb crash of the 2000s.
(Score: 2) by weeds on Tuesday October 11 2016, @01:16PM
My first reaction too, but as you actually READ the posting...
...the company is accused of making misleading statements to defraud investors.
IANAL, but I'm pretty sure fraud is different from an assumption of risk.
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