Netflix, Inc. (NFLX) Failed to Disclose Slower Acquisition Growth and Difficulties Retaining Customers
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Netflix, Inc. (NASDAQ: NFLX) common stock or call options, or sold put options, between October 19, 2021 and April 19, 2022, for violations of the Securities Exchange Act of 1934. Netflix operates an entertainment platform.
According to the complaint, on January 20, 2022, 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 fell $110.75, or 21.7%, to close at $397.50 per share on January 21, 2022.
Then, on April 19, 2022, 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 fell $122.42, or over 35%, to close at $226.19 per share on April 20, 2022.
Next Steps: If you acquired shares or call options of Netflix, Inc. (NFLX) , or sold put options, between October 19, 2021 and April 19, 2022, you have until July 5, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.