Those investors noted in a statement released Tuesday that the California-based group had made “false and/or misleading” statements and withheld some information.
Investors took to the platform, especially not to clarify that “the slowdown in the growth of the number of subscribers is due, among other reasons, to the sharing of accounts among a number of customers, and to the increased competition from other broadcasting platforms.”
Netflix announced on April 19 that it had lost 200,000 subscribers worldwide in the first quarter of the year, compared to the end of 2021, which is a precedent for more than ten years.
Lawyers who filed the class action lawsuit on behalf of the investors reminded that the share price fell “by more than 35 percent to settle at $226.19 on April 20.”
The broadcasting giant, which expects to lose more subscribers in the spring, has planned to tighten the screws on the sharing of IDs and passwords, allowing many people not to pay for access to the platform.
And Netflix, which expects to lose more subscribers in the spring, plans to adopt a tough policy on account sharing on its network, which allowed many to benefit from the service for free.
And “Netflix” announced in early March that it will conduct tests in South American countries to impose a financial allowance on its customers if they want to add additional profiles to their accounts. But “Netflix” expected to gain 2.5 million additional subscribers in the first quarter, while analysts were expecting an even larger number, which caused the shock of losing some of them.
The reason for the loss was partly the suspension of service in Russia after the invasion of Ukraine. The group clarified on April 19 that the suspension of its services in Russia after its invasion of Ukraine resulted in a net loss of 700,000 subscriptions. “Otherwise, we would have had 500,000 more subscriptions” compared to the previous quarter, she added. The total number of subscriptions to the platform has reached 221.64 million.