Twitter is being sued by a shareholder over claims that it misled investors about its prospects for growth. Doris Shenwick has accused the company of making false statements about the company's predicted user count and user engagement levels, causing wild fluctuations in Twitter's stock prices.
Shenwick claims Twitter executives misled investors in November 2014 when they promised an increase in monthly active users to 550 million in the intermediate term and more than a billion in "over the longer term". The predictions caused stock prices to climb, however after reporting flat user growth of 313 million the following quarter, stock nosedived.
The complaint [via Recode] reads: "[Twitter] had the motive and opportunity to commit the alleged fraud. Defendants also had actual knowledge of the misleading statements they made and/or acted in reckless disregard of the true information known to them at the time.
"In doing so, the defendants participated in a scheme to defraud and committed acts, practices and participated in a course of business that operated as a fraud or deceit on purchasers of Twitter common stock".
The lawsuit, filed in San Francisco, seeks class-action status for shareholders who bought stock in the social media company between February and July 2015.
Twitter has struggled to keep itself fresh in the face of intensified competition from the likes of Facebook, Instagram and Snapchat. According to Bloomberg, Snapchat surpassed 50 million monthly mobile app users in April, beating Twitter for the first time.