Netflix shareholders sue company

Netflix shareholders sue company
Photo by Juraj Gabriel / Unsplash

Netflix investors have sued the company, accusing its management of misleading investors about a six-month decline in subscriber growth that led to a significant drop in its share price and a huge financial loss.
The lawsuit, filed Tuesday in federal district court in San Francisco, alleges that Netflix violated U.S. securities laws by making "materially false and/or misleading statements" and because the streaming service "failed to disclose materially adverse facts about the company's business, operations and prospects."
As a reminder, last month Netflix reported a loss of 200,000 subscribers in the first three months of 2022 and projected a decline of two million more in the second quarter.
Recall that Netflix stock experienced its biggest one-day drop on April 20, the day after it reported a sharp decline in subscribers, which was largely due to its refusal to continue business in Russia. The value of the stock fell 35 percent at once, and the company lost $54 billion in market capitalization. Notably, the company itself predicted slow growth in the fourth quarter of 2021.