Netflix is facing a shareholder lawsuit claiming the left-wing streamer misled investors about consumer retaining difficulties, as its stock is sinking and users continue to flee.
Netflix investors who bought stock between Oct. 19, 2021 and April 19, 2022 are covered by the lawsuit, which was filed this week in a northern California federal court. The value of Netflix stock fell 67 percent during this time frame, according to the complaint.
The complaint alleges that the plaintiffs and other class members have incurred significant losses and damages as a result of the defendants’ unlawful acts and omissions, as well as the drastic drop in the market value of the Company’s securities.
The suit, which was filed by a trustee of the Imperium Irrevocable Trust, claims Netflix made public remarks in the most recent Q3 and Q4 earnings reports that painted an optimistic outlook of subscriber growth.
However, the fact was exposed in April when Netflix shocked its investors by revealing that it had lost 200,000 subscribers during the first quarter of 2022, and worse still, it expected to lose another 2 million in the months ahead.
The complaint alleges that during the Class Period, Netflix’s securities traded at improperly inflated prices as a result of these materially false and/or misleading statements and/or omissions.
“Plaintiff and other class members invested in or otherwise acquired Netflix’s stock relying on the company’s market price and market information regarding Netflix, and have been damaged as a result.”
The complaint is seeking class-action status, with the goal of attracting more Netflix shareholders to join.
Netflix’s financial prospects are so bleak that billionaire Bill Ackman recently sold 3.1 million shares at a loss of over $400 million, claiming he has lost his confidence in the streamer’s future prospects.
Netflix’s market capitalization has dropped by $50 billion since the firm revealed its first-quarter subscriber shortfall, according to Breitbart News.
