Netflix Sued by Shareholders Alleging Securities Fraud After Subscriber Miss
variety.comTodd Spangler NY Digital EditorNetflix misled investors about declining subscriber growth over the course of six months — leading to a massive drop in its stock price, according to a shareholder lawsuit.The lawsuit, filed Tuesday in federal district court in San Francisco, alleges Netflix violated U.S.
securities laws by making “materially false and/or misleading statements” and also because it “failed to disclose material adverse facts about the company’s business, operations, and prospects.”Last month, Netflix reported a net loss of 200,000 subscribers in the first three months of 2022 and forecast a decline of another 2 million in Q2, citing various challenges including password-sharing behavior among some 100 million households that do not pay for the service.
Netflix did not immediately respond to a request for comment.The lawsuit, which seeks class-action status, seeks unspecified monetary damages on behalf of investors who owned Netflix shares between Oct.
19, 2021, and April 19, 2022. Those include “compensatory damages in favor of Plaintiff and the other Class members against all defendants, jointly and severally, for all damages sustained as a result of Defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon.”Netflix stock suffered its biggest one-day loss on April 20, the day after reporting its weaker-than-expected subscriber numbers, falling 35% and shedding $54 billion in market capitalization.
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