Netflix has been slapped with a shareholder lawsuit in a U.S. court in San Francisco which accuses the streamer of misleading investors according to Reuters.
The filing, by a Texas-based investment trust, seeks damages for declines in Netflix’s share price this year after the company revealed it had missed its subscriber growth estimates for the first quarter of the 2022 calendar year.
The suit reportedly alleges that Netflix failed to disclose that its growth was slowing amid increased competition – meaning it was losing subscribers on a net basis. It seeks damages for investors who traded Netflix shares for the six month period of October 19th 2021-April 19th 2022.
Netflix shares dropped 20% in January after a slowdown in Q4 2021 growth, and then plunged more than 35% on April 20th after it revealed it had lost 200,000 subscribers in Q1 2022.
The company attributed the recent quarterly decline to inflation, competition, account sharing by customers, and its suspension of service in Russia.
Source: Reuters
