Twitter sued over false growth claims
TWITTER was sued by a shareholder over claims it misled investors on key growth metrics, including user count and user engagement, almost two years after touting plans to top 500million users.
The suit, filed on Friday in a federal court in San Francisco, comes as Twitter struggles to keep its audience from defecting to platforms such as Snapchat and Instagram.
Snapchat, the ninth-mostpopular app in the US, surpassed 50-million monthly mobile app users in April, besting Twitter for the first time, Bloomberg Intelligence analysts Jitendra Waral and Sean Handrahan said in August, citing ComScore.
Shareholder Doris Shenwick claims Twitter executives misled investors on its growth prospects in November 2014, promising an increase in monthly active users to 550-million in the “intermediate” term and more than a billion in the “longer term”.
The company failed to deliver on either estimate and concealed that it had no basis for those projections, the complaint said. As of June 30, the company had 313-million monthly active users, according to its website.
The lawsuit seeks classaction, or group, status to represent all shareholders who bought stock between February 6 2015, and July 28 2015.
Twitter officials did not immediately respond to an e-mail seeking comment.
After several quarters of stagnant user growth and slowing sales, the San Francisco-based company is banking on reengaging its users by letting them watch live video alongside tweets. In one such move on September 17, Twitter unveiled the first of 10 live streams in its much hyped deal with the National Football League. CNBC reported that the first broadcast reached 2.1-million viewers.
The case is Doris Shenwick v Twitter, 16-cv-05314, US District Court, Northern District of California.