OREANDA-NEWS An investment fund from Texas, on behalf of Netflix shareholders, filed a lawsuit in the district court in San Francisco against the streaming video company. Investors accuse the company of misleading them by not notifying them in a timely manner about the decline in the number of subscribers to the service. In the lawsuit, they demanded compensation for the losses they suffered as a result of the fall in the company's stock prices from October 19 last year to April 19, 2022, Reuters reports.

The lawsuit was filed in the Northern District of California court. The company and its top managers are accused of not disclosing in a timely manner that the growth in the number of paid subscribers has slowed down, and their number has fallen. The defendants were also required to compensate investors for losses from the decline in the price of Netflix shares this year. The lawsuit names Netflix executives Reed Hastings and Ted Sarandos and CFO Spencer Neumann as defendants in the case.

Netflix shares fell 20% in January after it reported weak subscriber growth. On April 20, the video service's securities collapsed by more than 35% and closed at $226.19 per share. The April drop came right after the streaming giant said it lost 200,000 subscribers in the first quarter, while it predicted an addition of 2.5 million subscribers. As of April 4, Netflix shares closed at $204 per paper.

The company attributed the decline in subscribers to inflation, competition from other video streaming services and the suspension of work in Russia, where it had 700,000 subscribers. Netflix lost more than $200 billion in market value after it reported its first-ever subscriber loss in a decade during the announcement of first-quarter results in April, Axios recalled.