Things are going from bad to worse for Netflix. It is now being sued by shareholders following plummeting stock prices. The streaming giant’s stock fell by $110.75 to $397.50 per share on January 21 and lost another $122.42 to close at $226.19 per share on April 20.
The lawsuit alleges Netflix misled statements to shareholders and failed to disclose details regarding its business and operations. It says Netflix admitted to over-forecasting paid net adds for Q4, resulting in the first drop in stock prices. The next drop followed after Netflix reported losing over 200,00 subscribers. The lawsuit can be found here.
Throughout the Class Period, Defendants made materially false and/or misleading
statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Netflix was exhibiting slower acquisition growth due to, among other things, account sharing by customers and increased competition from other streaming services; (2) that the Company was experiencing difficulties retaining customers; (3) that, as a result of the foregoing, the Company was losing subscribers on a net basis; (4) that, as a result, the Company’s financial results were being adversely affected; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis.
For years Netflix has thrown money at nearly every project that gets pitched to them. That reckless spending and the low quality content is what's driving off their subscribers. A big chunk of that is the woke programming which has been flat out rejected by the masses.
I just canceled.
The latest price hike, along with the negative press about attacking sharers, and a dirth of content to keep me subscribed. It was three strikes.
I had been ignoring the price hikes all these years, still occasionally watching a show there, but they have lost almost all of their third party content. The crackdown on password sharing doesn't affect me personally, but it does smell of a company looking for any excuse other than "mismanagement" to give to their board/shareholders. It all just finally added up to me not wanting to throw $20/mon down the drain for the amount of netflix content I watch.
Netflix was far and away the most expensive streaming service I was subscribed to.
I agree that mismanagement is the source of their woes. Some house cleaning starting from the top needs to happen.