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Netflix, Inc. Hit By Investor Class Action Lawsuit Over Alleged Securities Laws Violations

If you purchased shares of Netflix, Inc. (Public, NASDAQ:NFLX) between December 20, 2010 and October 24, 2011, you have certain options and there are strict and short deadlines running. Deadline: March 13, 2012. NASDAQ NFLX stockholders should contact the Shareholders Foundation, Inc.

To have your information reviewed for options and to recieve notifications about this case, please use this form. You may also send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.
Company Name(s): 
Netflix
Case Name: 
Netflix Shareholder Class Action 01/13/2012
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: NFLX
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
01/13/2012
Class Period Begin: 
12/20/2010
Class Period End: 
10/24/2011
Court of Filing: 
U.S. District Court for the Northern District of California
Deadline To File for Lead: 
03/13/2012
Summary: 

San Diego, Jan. 13, 2012 (Shareholders Foundation) -- An investor in NASDAQ:NFLX filed a lawsuit in U.S. District Court for the Northern District of California against Netflix, Inc. over alleged Violations of Federal Securities Laws in connection with its loss of subscribers.

According to the complaint the plaintiff alleges that Netflix, Inc. and certain of its officers and directors violated the Securities Exchange Act of 1934 by issuing allegedly materially false and misleading statements regarding Netflix’ business practices and its contracts with content providers.

On July 25, 2011, after the market closed, Netflix, Inc. (NASDAQ: NFLX) has released its second-quarter 2011 financial results. Netflix’ third-quarter sales and profit forecast missed analysts’ estimates and Netflix Inc. disclosed that a price change would cause a negative impact in new customer signups.

Among other things, Netflix, Inc said the global profit for the third quarter is expected to be $0.72 per share to $1.07 per share. However, analysts’ projected a profit of $1.11 per share.

Then on September 15, 2011, Netflix, Inc updated its third quarter 2011 guidance and revealed that it had lost a million subscribers due to its recently announced price increases becoming effective.

On September 19, 2011, Netflix, Inc announced that, in an effort to offset costs and rapidly defecting customers, Netflix, Inc would begin charging separately for its two services and had raised prices as much as 60%.

Then, on October 24, 2011, Netflix issued its third quarter 2011 shareholder letter, which reported a net loss of 810,000 U.S. subscribers, translating into a cumulative loss of 5.5 million subscribers. The subsequently filed Form 10-Q revealed that Netflix’s obligations for content over the coming years had increased to $3.5 billion, with $2.8 billion due within three years.

Shares of Netflix, Inc. (NASDAQ: NFLX) declined from as high as almost $300 in July 2011 to slightly over $77 on October 25, 2011.