New Delhi, May 8 (Agency) Streaming giant Netflix has been the target of many unfortunate incidences in 2022, and adding to its latest troubles is a lawsuit filed by one of its shareholders for not revealing the correct information about subscriber losses since 2020. Hit by the COVID-19 pandemic and the Russia-Ukraine conflict in 2022, the company saw a massive loss in subscribers ever since they removed their operations in Russia. According to reports, over 700,000 subscribers left Netflix following this action. The loss of subscribers has become higher ever since the streaming giant has been widely accused of pandering to left wing propaganda and promoting woke culture. The rise in subscription charges also played a part in Netflix eventually losing another 200,000 subscribers by April.
Right now Netflix’s shareholders are suing the company over massive subscriber losses. The suit, filed by a Texas-based investment trust in San Francisco federal court on Tuesday, is seeking damages after a dramatic decline in Netflix’s share value. “As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages,” the complaint reads. The lawsuit alleges that Netflix violated US security laws by making “materially false and/or misleading statements” to its shareholders. It’s also claimed that Netflix “failed to disclose material adverse facts about the company’s business, operations and prospects.” To curb its losses Netflix has responded by cutting loose its animation projects, firing executives and cancelling several highly anticipated shows. It has further responded by cracking down on password sharing hoping to increase the number of subscribers by limiting the ability to share Netflix accounts. The lawsuit, which seeks class-action status, seeks unspecified monetary damages on behalf of investors who owned Netflix shares between October 19, 2021, and April 19, 2022.
Damage reparations claimed by the filers include “compensatory damages in favour of Plaintiff and the other Class members against all defendants, jointly and severally, for all damages sustained as a result of Defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon.” In further damage for the OTT platform, the company saw its shares plummeting by over 35.1% overnight after reports of subscriber losses, losing a total $54.3 billion in a fortnight. This marks the single biggest one-day drop in Netflix history. Meanwhile, the lawsuit alleges that Netflix and its top executives “employed devices, schemes and artifices to defraud [investors], while in possession of material adverse non-public information”. The lawsuit further went on to claim that Netflix made “untrue statements of material facts and/or omitting to state material facts necessary in order to make the statements made about Netflix and its business operations and future prospects in light of the circumstances under which they were made not misleading.” Netflix’s stock price dropped a staggering 67% during the period covered in the lawsuit – from $691.69/share on November 17, 2021, to just $226.19/share on April 20, 2022.