Netflix made misleading statements about its subscriber count before reporting a decline in paying users. That is the opinion of investors taking the listed streaming platform to court in the American state of California.
When explaining its fourth-quarter 2021 results in January, Netflix said it had slightly overestimated the number of new subscribers. Only 8.3 million had been added in those three months instead of the expected 8.5 million. The streaming platform then predicted significantly fewer new paying users in the first quarter of this year but counted on gaining 2.5 million new customers.
Finally, in April, Netflix announced that it had lost 200,000 net subscribers during the year’s first three months. It referred to the nearly 100 million accounts being shared, the fierce competition from other streaming services, and the suspension of activities in Russia due to the war in Ukraine (which killed 700,000 paying users). The following trading day, Netflix plunged more than 35 percent.
Investors in the US now want to file a class action against Netflix because they believe the platform misled them in its first-quarter subscriber count. They filed documents with the District Court in Northern California to do so.