The Klein Law Firm announces that a class action complaint has been filed on behalf of shareholders of Netflix, Inc. (NASDAQ: NFLX) who purchased shares between July 22, 2014 and October 15, 2014. The action, which was filed in the United States District Court for the Northern District of California, alleges that the Company violated federal securities laws.
In May 2014, Netflix raised the price of its monthly streaming subscription to fund its content obligations. The complaint alleges that Company insiders knew from prior experience and analyses that price increases could have a substantial negative impact on subscriber growth; yet on July 21, 2014, CEO Reed Hastings and CFO David Wells told the market that the impact of the price increase had been “minimal” and “nominal.” The complaint alleges, however, that just three months later, on October 15, 2014, Defendants revealed that subscriber growth numbers were so low that the Company was forced to slash its projected earnings by nearly half, suggesting that “[as] best we can tell, the primary cause is the slightly higher price we now have compared to a year ago.”
Shareholders have until May 1, 2017 to petition the court for lead plaintiff status. Your ability to share in any recovery does not require that you serve as lead plaintiff. You may choose to be an absent class member.