Twitter Shares Up 3% After Company Agrees to $809.5 Million Settlement For Alleged Insider Trading

Shares of Twitter (TWTR) traded 3% higher Tuesday after the company announced Monday that it had agreed to pay $809.5 million to settle a class-action lawsuit accusing the company’s insiders of misleading investors.

The 2016 lawsuit alleged that co-founder Jack Dorsey, former CEO Dick Costolo gave investors misleading user engagement data.

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The lawsuit filed by a Twitter shareholder alleged that the group was hiding Twitter’s slowing growth.

At the same time, the insiders allegedly sold millions of their personal holdings. As such, the lawsuit alleged that Twitter insiders made “hundreds of millions of dollars in insider profits,” as they sold their own shares.

In its report to the SEC, Twitter noted that the settlement will not “constitute an admission, concession, or finding of any fault, liability, or wrongdoing by the Company or any defendant.”

To put the $809.5 Million settlement into perspective, the company reported a net income of $68 million and $65.6 million in the first and second quarter of 2021. That said, the company ended Q2 of 2021 with $8.61 billion in cash, cash equivalents and marketable securities.

 

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