A fresh legal problem arises for Netflix, as it battles falling subscriber numbers and unhappy shareholders.
The problems seem to be piling up for streaming giant Netflix, whose 2022 isn’t turning out quite as it hoped.
The big problem it faces is that for the first time since it fully pivoted its business to its streaming service, Netflix has lost subscribers. In the first three months of 2022, it lost 200,000 customers, and now is bracing itself to lose another two million by the end of June.
Naturally, financial markers responded calmly to this, knocking substantive value off the company. 35% of its value was wiped off in a day, accounting for some $54bn. And whilst some of that has been recovered since, there’s still some way to go.
Netflix has been making cuts since the news came out, but now it also faces shareholder wrath. Specifically, a lawsuit in San Francisco that accuses Netflix of making “materially false and/or misleading statements”. Furthermore, that it “failed to disclose material adverse facts about the company’s business, operations and prospects”.
The lawsuit is aiming for monetary damages – and let’s face it, whilst the number hasn’t been disclosed, they’re hardly going to be after fifty quid – and it’s a further headache for the company. Whether it settles or contests the case remains to be seen. At the very least, Netflix will be hoping its year gets better soon…
More on the case here.
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