Twitter Inc. 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 500 million users.
The company has experienced rapid initial growth since it was launched. It had 400,000 tweets posted per quarter in 2007. This grew to 100 million tweets posted per quarter in 2008. In February 2010, Twitter users were sending 50 million tweets per day. By March 2010, the company recorded over 70,000 registered applications. As of June 2010, about 65 million tweets were posted each day, equaling about 750 tweets sent each second, according to Twitter. As of March 2011, that was about 140 million tweets posted daily. As noted on Compete.com, Twitter moved up to the third-highest-rankingsocial networkingsite in January 2009 from its previous rank of twenty-second.
We are thinking these stats got into their head and twitter promised the investors that they’d increase the monthly user base to 550 million in the “intermediate” term and over one billion in the “longer” term, but that never happened, this caused the stock to drop 60% off Twitter’s stock value since April 2015.
The suit, which filed for Friday in federal court in San Francisco, comes as Twitter struggles to keep its audience from defecting to platforms such as Snapchat Inc. and Instagram Inc. Snapchat, the ninth-most-popular app in the U.S., 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 an Aug. 18 report, citing ComScore.
The shareholder, Doris Shenwick alleged that 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 estimateand 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.
Well well, with a whole lot to competitors like the almighty Facebook, Snap chat, Instagram and so on, they don’t expect to reach the 550 million users mark so easily, do they?