In the final days of summer 2021, Twitter announced it had settled a securities suit first launched in 2016. Typically when parties announce the resolution of a securities class action, the settlement materials are posted to the court docket promptly, often within a month. Shortly after that the judge signs a preliminary approval order, and then within weeks the administrator sends potential claimants the notice packet and posts information to a website-- and claim filing begins.
Not so with this Twitter suit. Though the parties announced settlement on September 20, 2021, the stipulation did not appear on the docket until January, and the judge did not issue his preliminary approval order until August 5. I grew and shaved several beards in this time.
Now, the wait is over. The administrator began sharing the notice and claim form on August 25, and claims are due November 23, 2022. A fund of this size, $809.5 million, is known in the class action trade as a "megasettlement." It has pushed the 2022 pool of funds available to investors over $5 billion.
The class action complaint against Twitter, filed on September 16, 2016
, alleged that the company had misled investors by hyping its user engagement levels and being overly optimistic about monthly active user growth. Given that Twitter is essentially a machine to access users' (i.e., humans') eyeballs, they therefore allegedly misled the key feature of their business. According to the plaintiffs, in early February, 2015, Twitter gave rosy predictions to investors about active user growth, which soon drove the price up to $52.87 per share. Then, on April 28, 2015, Twitter began a series of disclosures about the true state of engagement and active users that would eventually drive the price to less than half that. The complaint notes—on September 16, 2016, over a year later—that, “The stock has not recovered and presently trades at less than $20 per share.”
The litigation took five years to settle, and then another year for the parties and the court to make the claimform available. It's here at last... but note the claim filing deadline! That is the day before Thanksgiving!
Our team will be busy, but of course CCC's clients will be all set and ready to focus on markets (or on stuffing and cranberry recipes, or the spreads of the Cowboys and Lions games). If you have any colleagues or friends who are not clients of CCC and need help filing their firm's claims or their clients' claims, please let us know. We will be happy to help them with this settlement and with any of the other 141 settlements (so far) of 2022.