Netflix Hit With Class-Action Lawsuit by Disgruntled Investors
Netflix was recently slapped with a class-action lawsuit from disgruntled investors who claim that the company withheld information before the company’s stock-price drop that happened over last summer and fall. The lawsuit was filed in the U.S. District Court of Northern California by the City of Royal Oak Retirement System, on behalf of all plaintiffs similarly situated.
The law firm that expedited the suit, Robbins, Geller, Rudman & Dowd LLP, specializes in class-actions complaints. The claims that Netflix did not reveal to its investors that it some of its contracts to stream content — Netflix’s current bread and butter — would need to be renegotiating at a much higher price. The case names Netflix CEO Reed Hastings, CMO David Wells, CMO Leslie Kilgore, chief content officer Ted Sarandos, and chief product officer Neil Hunt as defendants.
Last summer, the day before Netflix split its streaming and DVD-by-mail subscriptions into two separate fees and also raised the price of some of its subscription fees, its stock was trading on the NASDAQ at a $291.27 per share; comparatively, as of last Friday after the market closed, Netflix stock was trading at $94.79 a share — certainly a steep decrease.
As of this time, Netflix has not commented on the suit.