Netflix Wins First Round in Shareholder Lawsuit Over Account-Sharing Impact

Judge dismisses case, citing lack of evidence that Netflix made false statements about subscriber growth.

Netflix has won the first round of a case over allegations it downplayed the impact of account-sharing on subscriber growth, with a federal judge’s dismissal of the shareholder lawsuit.
The suit revolves around Netflix, for the first time in a decade in 2022, disclosing subscriber losses. It attributed the shedding of roughly 200,000 users to a sluggish economy, increasingly stiff competition from other streaming platforms and the war in Ukraine.
The suit from a Texas-based investment trust alleged that the company was overly optimistic about its business prospects despite it being aware of the impact account-sharing would have on growth.
In an order dismissing the suit, the court concluded that the statements from the ex-workers don’t provide enough evidence that Netflix made false statements to survive dismissal.
Plaintiffs were allowed leave to amend, meaning they have the opportunity to fix their claims.