Netflix Is Being Sued By Investors For "Failing To Disclose" Subscriber Drop

thegamer.com:

Netflix's troubles continue to grow, as its recent subscriber drop has now led to a lawsuit. Investors in the streaming giant filed the lawsuit on May 3, and allege that Netflix bosses "misled" them about the declining subscriber rate, and made "materially false and/or misleading statements" about this issue.

This comes as Netflix continues to outline plans to cut costs and bring in more subscribers. This has ranged from scrapping numerous animated shows, laying off writers with just two weeks' severance, and announcing a new, cheaper subscription tier that will be supported with ads.

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As reported by Variety, shareholders claim that Netflix "failed to disclose material adverse facts about the company’s business, operations and prospects". They are seeking damages for the period of October 19, 2021, to April 19, 2022. April 19 is, of course, the day Netflix publicly disclosed that it had lost subscribers for the first time in ten years. If the claims being made are true, this would suggest that shareholders were made aware of this at the same time as us.

Unsurprisingly, the news that Netflix had lost 200,000 subscribers - and was projecting two million further losses this year alone - caused its stock price to drop dramatically. This would have hit its investors hard - something they may have tried to mitigate had they known that the subscriber count was falling.

The company's plans to save money haven't got the stock prices out of this slump at all. In fact, at the time of writing, they are now worth less than they were on April 20, when the initial damage was felt. Netflix is yet to issue a public response to the