Netflix shareholders sue over subscription slump disclosures – Reuters
The Netflix logo is seen on a TV remote controller, in this illustration taken January 20, 2022. REUTERS/Dado Ruvic/Illustration
May 4 (Reuters) – Netflix Inc (NFLX.O) has been hit with a shareholder lawsuit in a U.S. court in California accusing the streaming entertainment company of misleading the market about its ability to keep adding subscribers in recent months.
The lawsuit filed in San Francisco federal court on Tuesday seeks damages for declines in Netflix’s share price this year after the company missed its subscriber growth estimates.
Filed by a Texas-based investment trust, the lawsuit accused Los Gatos, California-based Netflix and its top executives of failing to disclose that its growth was slowing amid increased competition and that it was losing subscribers on a net basis.
Netflix shares dropped 20% in January after it disclosed weak subscriber growth. Netflix shares then plunged more than 35% on April 20 to close at $226.19 after it said it lost 200,000 subscribers in its first quarter, falling well short of its forecast of adding 2.5 million subscribers. Its shares were trading at $199.87 at midday on Wednesday.
The company attributed the quarterly decline to inflation, competition from other streaming services and its suspension of service in Russia following the Russian invasion of Ukraine, which cost Netflix 700,000 members.
A Netflix spokesperson did not immediately respond to a request for comment.
The lawsuit names Netflix Co-Chief Executives Reed Hastings and Ted Sarandos and Chief Financial Officer Spencer Neumann. It seeks damages for investors who traded Netflix shares between Oct. 19, 2021 and April 19, 2022.
The case is Pirani v. Netflix Inc et al., No. 22-cv-02672, U.S. District Court, Northern District of California.
Our Standards: The Thomson Reuters Trust Principles.
Jody Godoy reports on banking and securities law. Reach her at email@example.com
Sign up to our legal newsletter for a smart look at the day’s headlines concerning the practice of law.
Subscribe to our newsletter to get all the news you need to start your day.
Thomson Reuters Institute
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world’s media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2022 Reuters. All rights reserved
via Inferse.com https://www.inferse.com
May 15, 2022 at 08:14PM