Tuesday, September 27, 2022

Twitter to pay $809.5 million in stock-price settlement with shareholders

Twitter Inc. on Wednesday said it has agreed to pay $809.5 million to settle claims related to the performance of its stock during its initial public offering in 2013.

The company said the largest components of the settlement will be in the form of a $711.5 million cash payment to plaintiffs and a $30 million investment in the Securities Investor Protection Corp. (SIPC), which regulates U.S. broker-dealers and their agents to aid investors and recover investor assets in cases of large misstatements or misrepresentations. Twitter settled the claims for $104.5 million in October 2015.

The settlement with plaintiffs alleged that Twitter and certain officers and directors misled investors about the company’s progress and prospects in the five months prior to its November 2013 initial public offering, according to the company. The suit claims Twitter directors misrepresented the company’s financial performance while publicly recommending that investors buy its stock ahead of the IPO.

The firm acknowledged the non-binding settlement agreement in a filing with the Securities and Exchange Commission late Wednesday.

The settlement is the largest of its kind in history and is part of Twitter’s broader push to resolve more cases related to its IPO, Chief Financial Officer Ned Segal said on a conference call with analysts in October 2015.

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