Facts

The lead plaintiff KBC brought this securities class action on behalf of all persons and entities that, during the period from February 6, 2015, through July 28, 2015, (the class period), purchased or otherwise acquired shares of the publicly traded common stock of Twitter, Inc., and were damaged thereby. The action was brought against Twitter for violations of Sections 10 and 20(a) of the Securities Exchange Act of 1934. Prior to the state of the class period, Twitter's public filings revealed a trend of declining timeline views reflecting a decrease in user engagement. Defendants identified the main reason for the decline as "changes" to the platform that "allowed users to more efficiently access" their content. Defendants explained that the improvements had resulted in fewer timeline views ultimately would lead to more satisfied users, which in turn would lead to higher user engagement and monthly access users (MAU) growth. User growth trends reflected in the number of MAUs and user engagement trends are key factors that affect Twitter's revenue. Defendants reassured investors that the negative effect of changes to the platform on user engagement would be temporary and that new product initiatives would increase user engagement and MAU growth.

PLAINTIFFS' CONTENTIONS: Plaintiff contended that defendants knowingly concealed and made false statements about the company's key operating metrics during the class period, in violation of the Securities Exchange Act. Plaintiffs further contended that the omissions and false and misleading statements artificially inflated the price of Twitter's common stock and that, when defendants disclosed the true facts, Twitter's stick price dropped.

DEFENDANTS' CONTENTIONS: Defendants denied all contentions. Defendants further contended that the statements detailed in the complaint were not materially false or misleading; that defendants did not make the statements with the requisite intent to deceive investors, that they did not have a duty to disclose certain information to the public; and that the price of Twitter's common stock was not impacted by the statements and alleged omissions at issue. Defendants also disputed the extent to which class members suffered recoverable losses.

Result

The case settled for $809,000,000.