It’s more woes for the global streaming giant, Netflix as some of its shareholders reportedly filed a lawsuit over its recent subscriber loss.
According to Variety, the lawsuit, filed on Tuesday, May 3, 2022, in a federal district court in San Francisco accuses the online streamer of not disclosing the true extent of its recent subscriber loss.
Recall that Netflix announced last month that it lost over 200,000 subscribers in the first quarter of 2022 with an estimated 2 million by Q2.
The shareholders allege that Netflix violated U.S. security laws by making “materially false and/or misleading statements” to its shareholders. They also claimed that Netflix “failed to disclose material adverse facts about the company’s business, operations, and prospects.”
The lawsuit seeks unspecified monetary damages on behalf of investors who owned Netflix shares between October 19, 2021, and April 19, 2022.
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Damages claimed to include “compensatory damages in favor of Plaintiff and the other Class members against all defendants, jointly and severally, for all damages sustained as a result of Defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon,” Variety reports.
Since announcing its staggering loss, Netflix has reacted by introducing early tests to crack down on password sharing.
The streamer also announced cuts to its animation department.