It’s tempting to view Twitter’s $809.5 million settlement today of a shareholder lawsuit—which alleged that top executives misled investors with overly optimistic statements about user growth—as a meaningful development. The news media spends much of its time obsessing over the massive gulf between company executives’ public statements and private discussions—as last week’s Wall Street Journal Facebook series reminded us. Any time a company has to fork over money as a penalty for misleading the public, it seems like a triumph of truth over fiction. (And nowadays, don’t we all want that?)
In reality, though, Twitter’s settlement likely won’t do anything but make executives even more reluctant to say anything substantive in public. The executives in the spotlight are long gone from Twitter—then-CFO Anthony Noto now runs SoFi, the online lender which recently went public, while then-CEO Dick Costolo left in mid-2015. While $809 million is 10% of Twitter’s outstanding cash, the company can afford it. And Wall Street won’t care. Investors typically treat such settlements, unless they’re big enough to bankrupt a company, as one of those “one-time” items best not examined too closely.