Netflix facing lawsuit from investors over subscriber loss
Suit claims company concealed decline in signups.
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A class-action lawsuit against Netflix alleges that the company misled its investors over the precipitous decline in subscribers the company suffered in the first quarter of this year.
The suit, filed in the United States District Court of Northern California, alleges that the streaming company “made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects,” related to that decline.
The company failed to reveal that it “was exhibiting slower acquisition growth due to, among other things, account sharing by customers and increased competition from other streaming,” the suit claims, claiming that it was “losing subscribers on a net basis.”
The suit is asking for “compensatory damages … for all damages sustained as a result of [Netflix’s alleged] wrongdoing, in an amount to be proven at trial, including interest thereon.”
In April Netflix reported a net loss of about 200,000 subscribers, its first such loss in years.