Netflix’s large pool of investors is not happy, not happy at all. Some shareholders are so dissatisfied that they have turned around and filed lawsuits against the power company due to allegations that the company’s executives misled them. how good they were just a few months ago.
The main content of the lawsuit filed Tuesday in San Francisco’s federal district court is that Netflix misled shareholders by failing to disclose issues with the business and potential customers. Netflix has claimed that the reason the stock price took a nose dive from a dizzyingly high cliff The following revelations in April are due to password sharing and users moving on to other streaming platforms.
Shareholders say that Netflix had not revealed much or any of its difficulties to investors during the 2021 to 20 jump.22, which led to Netflix shares being traded “at artificially inflated prices,” according to the lawsuit.
Netflix declined to comment on the lawsuit.
IN court documentsinvestors said that Netflix had predicted large increases in subscribers of 8.5 million during its quarterly investor exhibition on October 19, 2021. The following year, January 20, 2022, Netflix announced after the markets closed that they had “slightly over-forecast paid net premiums in Q4. , ”And that the actual figures were closer to 8.3 million subscribers and that they only expected to increase 2.5 million subscribers in the first quarter of the new year, lower than last year.s 4 million in the same quarter last year.
Of course, the result of that quarter was much worse. On April 19, the company reported losses of 200,000 subscribers and that even more will leave the platform during the next quarter.
The case, which seeks litigation status, is being led by Fiyyaz Pirani, a trustee for the Texas-based Empire Irrevocable Trust. Investors are represented by the firm Glancy Prongay & Murray, which is also involved in a class action lawsuit against Meta. The suit names Netflix, along with co-CEOs Reed Hastings and Ted Sarandos plus CFO Spencer Neumann, as defendants.
The lawsuit requires an undisclosed amount in compensation for investors who owned shares between 19 October 2021 and 19 April 2022. The lawsuit estimates that there may be hundreds of thousands of people who could potentially sign the class action lawsuit as there were millions of shares traded from October to April, and there are millions of shares currently being held.
Since Netflix reported their losses in April, the share price has been at proverbial rubbish binfar away the pandemic induced high at almost $ 700 per share at the end of 2021. The shock of the Q1 result was followed by a round of surprising layoffs in the middle cut to planned Netflix original shows and movies. Netflix executives have also suggested introducing a new, cheaper level for subscribers which may include ads.