SAN JOSE, Calif. (Legal Newsline) - Netflix has defeated a class action complaint that sought compensation for investors.
California federal judge Jon Tigar on Jan. 5 granted the company's motion to dismiss consolidated litigation, granting 28 days for lead counsel Glancy Prongay & Murray to file an amended complaint to cure the problems Tigar identified.
The case centers around alleged lost revenue caused by Netflix customers sharing their passwords with others. Plaintiff Fiyyaz Pirani said the company made misleading statements to would-be investors about revenue growth.
"However, without more, the allegations do not establish at what level Netflix monitored account sharing during the Class Period, or that Defendants were aware of the extent of the account sharing problem, i.e., that Defendants were aware that account sharing was 'creating revenue growth headwinds' throughout the Class Period," Judge Tigar wrote.
"This is especially true in light of the Defendants' explanation that the impact that account sharing was having on Netflix's growth was 'obscured by [its] COVID growth."
Plaintiff Imperium Irrevocable Trust said it lost more than $34 million in its Netflix investment. Its lawsuit asks for certification of a class of those who bought common stock or call options between Oct. 19, 2021, and April 19, 2022.
Litigation followed Netflix's announcement in April that it lost 200,000 subscriptions during the first quarter of 2022. Upon that news, its stock price fell $122.42 per share to close at $226.19 on April 20.