Shareholders went to Netflix

Shareholders have filed a lawsuit against Netflix alleging a violation of the U.S. Securities Act, accusing the company of giving a misleading statement about its subscriber base for six months. The lawsuit filed in the San Francisco Federal Court is seeking damages from the streaming giant for the deep flight of the stock price.

The Imperium Irrevocable Investment Trust, which represents investors, is seeking class action status on behalf of all injured parties who held Netflix shares between 19 October 2021 and 19 April 2022. Shares fell a total of 67 percent during the period. A quick 20 percent in January after the company acknowledged that its forecast for fourth-quarter net growth was exaggerated and first-quarter growth fell short of expectations.

This was followed by a 35 percent drop on April 20, after the publication of the first quarterly report revealed that the company had lost more subscribers than it had won, resulting in a loss of 200,000 users. Thus, the number of subscribers decreased from 221.84 million to 221.64 million in the first quarter of 2022, and the company forecasts the loss of two million more subscribers over the next three months. At that time, the stock was already at $ 199.87, up from $ 691.69 last November.

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According to the defendants, Netflix’s management deliberately misled investors while in possession of material, non-public information, in addition to alleging untrue facts and / or failing to disclose material information necessary to disclose Netflix and its business and future interests. statements about its prospects should not be misleading. As a result, they also suffered material damage.

The company explained the quarterly decline with inflation, password sharing, intensifying competitors (Disney +, HBO Max) and service suspensions in Russia. The latter factor resulted in the loss of 700,000 subscribers. Netflix has not yet commented on the lawsuit against it. When announcing its quarterly results, the company also said it was “open” to expanding its offerings with cheaper advertising packages than at present, and plans to share passwords in the future.


Source: HWSW Informatikai Hírmagazin by www.hwsw.hu.

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