May 4, 2022
A San Antonio, Texas-based investor has filed a lawsuit against Netflix, claiming the SVOD behemoth mislead investors about the extent of its subscriber woes. The streamer last month disclosed it lost 200,000 subscribers worldwide in the first quarter, ended March 31. Netflix is also projecting a loss of 2 million subs in the current second quarter, ending June 30, due largely to the shutdown of operations in Russia.
Netflix had projected a Q1 subscriber gain of 2.5 million.
The suit (Pirani v. Netflix, No. 22-cv-02672), filed in U.S. District Court, San Francisco, alleges co-CEOs Reed Hastings, Ted Sarandos, and CFO Spencer Neumann, didn’t disclose to investors the extent of the service’s subscriber churn.
Fallout from the subscriber loss has been swift, with Netflix losing more than $50 billion in market valuation. The suit seeks unspecified damages for Netflix shareholders of record from Oct. 19, 2021, to April 19, 2022.
Netflix, which doesn’t comment on pending litigation, was not available for immediate comment.