NEW YORK, Sept. 30, 2016 /PRNewswire/ -- Pomerantz LLP
announces that a class action lawsuit has been filed against
Twitter, Inc. ("Twitter" or the "Company") (NYSE: TWTR) and
certain of its officers. The class action, filed in
United States District Court, Northern District of California, and docketed under 16-cv-05439, is
on behalf of a class consisting of all persons or entities who
purchased or otherwise acquired Twitter securities between
February 6, 2015 and July 28, 2015 both dates inclusive (the "Class
Period"). This class action seeks to recover damages against
Defendants for alleged violations of the federal securities laws
under the Securities Exchange Act of 1934 (the "Exchange
Act").
If you are a shareholder who purchased Twitter securities during
the Class Period, you have until November
15, 2016 to ask the Court to appoint you as Lead Plaintiff
for the class. A copy of the Complaint can be obtained at
www.pomerantzlaw.com. To discuss this action, contact
Robert S. Willoughby at
rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll
free, ext. 9980. Those who inquire by e-mail are encouraged to
include their mailing address, telephone number, and number of
shares purchased.
[Click here to join this class action]
Twitter is a global platform for public self-expression and
conversation in real time, where any user can create a Tweet and
any user can follow other users. The Company's main source of
revenue is advertising. Because advertising revenue is driven by
the total number of users on the platform and, equally as
important, the level of engagement of such users, the Company and
analysts have focused closely on metrics measuring total users and
user engagement. Twitter reported two primary user metrics: Monthly
Active Users or "MAUs" (a measure of the total user base) and
timeline views (a measure of user engagement).
The Complaint alleges that throughout the Class Period,
Defendants made false and/or misleading statements, as well as
failed to disclose material adverse facts about the Company's
business, operations, and prospects. Specifically, Defendants
made false and/or misleading statements and/or failed to disclose
that: (i) Defendants concealed adverse facts they knew or
deliberately disregarded, including that by early 2015, (ii) daily
active users ("DAUs") had replaced the timeline views metric as the
primary user engagement metric tracked internally by Twitter
management and that the trend in user engagement growth (i.e.,
DAUs) was flat or declining. In addition, (iii) defendants
concealed that new product initiatives were not having a meaningful
impact on MAUs or user engagement, (iv) that Twitter's stated
"acceleration [in MAU growth]" was the result of low-quality MAU
growth, and that defendants lacked a basis for their previously
issued projections of approximately 20% MAU growth and 550 million
MAUs in the immediate term, (v) as a result of the foregoing,
Twitter's public statements were materially false and misleading at
all relevant times.
On February 5, 2015, after the
market closed, Twitter released its fourth quarter and fiscal year
2014 financial results. The Company blamed lower than expected MAU
growth on "quarter-specific factors . . . which include seasonality
and a couple of issues related to the launch of iOS 8."
Furthermore, the Company reiterated its outlook for strong MAU
growth going forward and emphasized the success of the new product
initiatives designed to "drive [MAU] growth." Defendants also
reiterated that Twitter would discontinue reporting its primary
user engagement metric, timeline views.
On April 28, 2015, Twitter
released its first quarter 2015 financial results. The Company
reported non-GAAP income of $47
million, or $0.07 non-GAAP
EPS, and revenue of $436 million for
the first quarter ended March 31,
2015. Additionally, the Company provided its outlook for the
second quarter of 2015, projecting second quarter revenue of
$470 million to $485 million. Twitter
also lowered its full year 2015 revenue forecast to between
$2.17 billion and $2.27 billion from
prior guidance of $2.30 billion to $2.35
billion. Furthermore, the Company reported that Twitter's
MAUs only increased 5% over the prior quarter.
As a result of this news, the price of Twitter stock dropped
$9.39 per share to close at
$42.27 per share on April 28, 2015, a decline of 18% on volume of
over 77 million shares. On the following day, April 29, 2015, the price of Twitter stock
dropped again, falling $3.78 per
share to close at $38.49 per share, a
one-day decline of nearly 9% on volume of over 120 million shares.
However, the stock continued to trade at artificially inflated
levels as Defendants assured investors that new initiatives to
drive user growth and engagement were still in the early
stages.
Then, on July 28, 2015, after the
market closed, Twitter issued a press release announcing its second
quarter 2015 financial results. The Company reported non-GAAP
income of $49 million, or
$0.07 non-GAAP EPS, and revenue of
$502 million for the second quarter
ended June 30, 2015. Additionally,
the Company provided its outlook for the third quarter of 2015,
projecting third quarter revenue of $545
million to $560 million. Twitter also provided its outlook
for the 2015 full year, projecting revenue in the range of
$2.20 billion to $2.27 billion.
As a result of this news, the price of Twitter stock plummeted
$5.30 per share to close at
$31.24 per share on July 29, 2015, a one-day decline of nearly 15% on
volume of nearly 93 million shares.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los
Angeles, is acknowledged as one of the premier firms in the
areas of corporate, securities, and antitrust class litigation.
Founded by the late Abraham L.
Pomerantz, known as the dean of the class action bar, the
Pomerantz Firm pioneered the field of securities class actions.
Today, more than 80 years later, the Pomerantz Firm continues in
the tradition he established, fighting for the rights of the
victims of securities fraud, breaches of fiduciary duty, and
corporate misconduct. The Firm has recovered numerous
multimillion-dollar damages awards on behalf of class members. See
www.pomerantzlaw.com
CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
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SOURCE Pomerantz LLP