It’s been a rough four weeks for Netflix, as the streaming service’s last quarterly meeting had negative results on growth prospects and plunged its share value.
And now another headache has arisen for the company: A class action lawsuit has been filed against this and the plaintiffs are the investors themselves.
Law firm Glancy Prongay & Murray LLP sued in the United States District Court for the Northern District of California for Netflix’s “make materially false and/or misleading statements“And as a result, investors lost money.
At the end of last year, Netflix fell short of subscriber estimates with a margin of just 200,000 users. At the start of 2022, it had 200,000 users against an estimated 2.5 million additions.
The number of negative paying users was due to the end of service in Russia. What this meant the loss of 700,000 paying subscribers.
When this news was made public, Netflix share price fell 21% from $348.61 to $226.19.
The gist of the case is that Netflix “has made materially false and/or misleading statements and has not disclosed material adverse facts about the business, operations and prospects of the company“, especially regarding slower-than-expected growth.
Case, “Netflix, Inc. acquired or otherwise acquired between October 19, 2021 and April 19, 2022. common stock or call options or put options sold“, and seek compensation.
With all this, the company with the big red N has to deal with problems inside as well as outside of its offices. Without a doubt, 2022 won’t be the year of Netflix.
Source: Computer Hoy
