Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Twitter Suffers $537M Loss over Lawsuit Payout


Wed 27 Oct 2021 | 10:48 AM
Omnia Ahmed

Twitter announced on Tuesday it had incurred a $537 million net loss in the third quarter due to a lawsuit alleging investors were misled about slowing user growth.

Although the revenue rose sharply with the help of robust ad sales, Twitter still posted an operating loss of $743 million, fueled by the more than $800 million settlement.

The 2016 federal suit filed by shareholders accused the defendants, such as former CEO Dick Costolo, of not disclosing the full picture of the company’s state while they sold their personal stock on the platform.

The shareholders claimed board members sold stock at an “artificially inflated” price. The suit was filed the year after Twitter’s shares tumbled in value as the company revealed lethargic growth.

However, the company revealed that the third-quarter revenue hit $1.3 billion, an increase of 37 percent over this time last year. It also noted that advertising revenue reached $1.14 billion, which is 41 percent above 2020’s third-quarter results.