Netflix Inc has been hit with a shareholder lawsuit in a U.S. court in California.
The shareholder is accusing the streaming entertainment company of misleading the market about its ability to keep adding subscribers in recent months.
The lawsuit filed in San Francisco federal court seeks damages for declines in Netflix’s share price this year after the company missed its subscriber growth estimates.
The lawsuit accused Netflix and its top executives of failing to disclose that its growth was slowing amid increased competition and that it was losing subscribers on a net basis.
The company attributed its quarterly decline to inflation, competition from other streaming services and its suspension of service in Russia following the Russian invasion of Ukraine, which cost Netflix 700,000 members.
The lawsuit names Netflix Co-Chief Executives Reed Hastings and Ted Sarandos and Chief Financial Officer Spencer Neumann. It seeks damages for investors who traded Netflix shares between Oct. 19, 2021 and April 19, 2022.