The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of those who acquired Netflix, Inc. (“Netflix” or the “Company”) (NASDAQ: NFLX) securities from October 19, 2021 through April 19, 2022, both dates inclusive (the “Class Period”). Investors have until July 5, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Netflix primarily operates an entertainment platform that offers TV series, documentaries, feature films, and mobile games across a variety of genres and languages. It also offers a DVD-by-mail service in the U.S.
On January 20, 2022, after the market closed, Netflix reported that it “slightly over-forecasted paid net adds in Q4,” adding 8.3 million subscribers compared to the 8.5 million forecast. The Company also stated that, despite “healthy” retention and engagement, it only expected to add 2.5 million net subscribers during first quarter 2022, below the 4.0 million net adds in the prior year period. On this news, the Company’s stock price declined by $110.75 per share, or approximately 21.79%, from $508.25 per share on January 20, 2022 to close at $397.50 per share on January 21, 2022.
On April 19, 2022, after the market closed, Netflix reported that it lost 200,000 subscribers during the first quarter of 2022, compared to prior guidance expecting the Company to add 2.5 million net subscribers. The Company cited the slowing revenue growth to four factors, including account sharing with an estimated 100 million additional households and competition with other streaming services. On this news, the Company’s share price declined by $122.42 per share, or approximately 35.23%, from $348.61 per share on April 19, 2022 to close at $226.19 per share on April 20, 2022.
The lawsuit alleges throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Netflix was exhibiting slower acquisition growth due to, among other things, account sharing by customers and increased competition from other streaming services; (2) the Company was experiencing difficulties retaining customers; (3) as a result of the foregoing, the Company was losing subscribers on a net basis; (4) as a result, the Company’s financial results were being adversely affected; and (5) as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis.