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posted by cmn32480 on Tuesday October 11 2016, @10:16AM   Printer-friendly
from the past-performance-is-not-indiciative-of-future-gains dept.

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


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  • (Score: 0) by Anonymous Coward on Tuesday October 11 2016, @12:58PM

    by Anonymous Coward on Tuesday October 11 2016, @12:58PM (#412920)

    So Apple, who historically make very conservative predictions about upcoming growth, profitability and products, are blasted for lowering expectations. Twitter, which would have been just fine if someone would have made a bid for them over the last few weeks is now getting sued for missing forecasts and projections.

    Tip of the Day: Investing is a gamble. Never expect a company to tell you the truth. If they say "we're doing great!" you should hear "we're doing OK", if they say "we're doing OK" you should hear "be prepared to sell", and if they say "things are looking a bit iffy" you should hear "too late sucker, management has already started unloading their shares".

  • (Score: 0) by Anonymous Coward on Tuesday October 11 2016, @02:33PM

    by Anonymous Coward on Tuesday October 11 2016, @02:33PM (#412945)

    I tried having a discussion with a friend about how I don't like the stock market cause its basically gambling with real people's livelihoods, but all I got was flak. Any thoughts about how to remove the gambling aspect?

    • (Score: 1, Informative) by Anonymous Coward on Tuesday October 11 2016, @03:05PM

      by Anonymous Coward on Tuesday October 11 2016, @03:05PM (#412955)

      VTSAX. Vanguard Total Stock Market Index Admiral Shares. You will own shares of every company traded on the NASDAQ and NYSE. You are betting on the profitability of 3000+ corporations, some of them multinational. If you want to bet on the entire planet, Vanguard has an index for that as well. I don't remember the ticker though. With the global index, as long as the entire global economy doesn't collapse, you won't lose all your money. Share prices will fluctuate, but as long as the planet is generally productive, you will be ok. Even if the world economy is halved, as long as things are functional, businesses will pay dividends and/or grow.