A securities fraud class action has been filed on behalf of all persons who purchased the common stock of Netflix between December 20, 2010 and October 24, 2011. The case is entitled City of Royal Oak Retirement System v. Netflix, Inc. et al. Case No. 3:12-cv-00225 (N.D. Calif. January 13, 2002).
The Plaintiff alleges that during the class period, the Defendants issued materially false and misleading statements regarding the company’s business practices and its contracts with content providers. Specifically, the Defendants concealed negative trends in Netflix’s business, and as a result, Netflix’s stock traded at artificially inflated prices during the class period, reaching a high of almost $300 per share on July 13, 2011, the Plaintiff contends. The Plaintiff asserts that after Netflix revealed that it had lost a million subscribers when its price increases became effective, Netflix stock collapsed nearly $40 per share to close at just under $170 per share on September 15, 2011.
The Plaintiff is a shareholder of Netflix.
Netflix offers subscription-based services for television shows and movies by mailing DVDs to subscribers’ homes or via streaming to subscribers’ televisions, computers and mobile devices. The individual Defendants are directors and officers of Netflix.