Case Page

 

Case Status:    DISMISSED    
On or around 04/14/2016 (Other)

Filing Date: January 13, 2012

According to a press release dated January 13, 2012, the complaint charges the Company and certain of its officers and directors with violations of the Securities Exchange Act of 1934.

The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business practices and its contracts with content providers. As a result of defendants’ false statements, the Company’s stock traded at artificially inflated prices during the Class Period, reaching a high of almost $300 per share on July 13, 2011. Plaintiffs assert that while the Company’s stock was, Company insiders were selling 388,661 shares of their own stock for proceeds of $90.2 million.

On September 15, 2011, the Company updated its third quarter 2011 guidance and revealed that it had lost a million subscribers due to its recently announced price increases becoming effective. On this news, stock prices fell nearly $40 per share to close at just under $170 per share. On September 19, 2011, the Company announced that, in an effort to offset skyrocketing costs and rapidly defecting customers, the Company would begin charging separately for its two services and had raised prices as much as 60%. The Company stock dropped to $130 per share on this news. Then, on October 24, 2011, the Company issued its third quarter 2011 shareholder letter, which reported a net loss of 810,000 U.S. subscribers, translating into a cumulative loss of 5.5 million subscribers. The subsequently filed Form 10-Q revealed that the Company’s obligations for content over the coming years had skyrocketed to $3.5 billion, with $2.8 billion due within three years. These disclosures caused stock to fall from $118.84 per share on October 24, 2011 to $80.86 per share on October 27, 2011, a 32% decline in three days and a 73% decline from the stock’s Class Period high.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) The Company had short-term contracts with content providers and defendants were aware that the Company faced the choice of renegotiating the contracts in 2011 at much higher rates or not renewing them at all; (b) content providers were already demanding much higher license fees, which would dramatically alter the Company’s business; (c) defendants recognized that the Company’s pricing would have to dramatically increase to maintain profit margins given the streaming content costs they knew the Company would soon be incurring; and (d) the Company was not on track to achieve the earnings forecasts made by and for the Company for 2011.

April 5, 2012, an Order Relating and Consolidating Cases was issued by the Court; and subsequently,on April 26, 2012, an Order appointing lead plaintiff and lead counsel was issued by the Court.

On June 26, 2012, plaintiffs filed their consolidated class action complaint.

On August 20, 2013, the Court granted the Defendants Motion to Dismiss. The Plaintiffs' First Amended Consolidated Class Action Complaint was dismissed with prejudice.

On August 27, the Court ordered and adjudged that the defendants' motion to miss is granted. On February 18, 2014, the Lead Plaintiffs filed a Notice of Appeal challenging this decision. On April 11, 2016, the Ninth Circuit issued a ruling affirming the decision of the district court.

COMPANY INFORMATION:

Sector: Services
Industry: Broadcasting & Cable TV
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: NFLX
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: N.D. California
DOCKET #: 12-CV-00225
JUDGE:
DATE FILED: 01/13/2012
CLASS PERIOD START: 12/20/2010
CLASS PERIOD END: 10/24/2011
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Robbins Geller Rudman & Dowd LLP (San Francisco)
    100 Pine Street, Suite 2600, Robbins Geller Rudman & Dowd LLP (San Francisco), CA 94111
    415.288.4545 415.288.4534 ·
No Document Title Filing Date
COURT: N.D. California
DOCKET #: 12-CV-00225
JUDGE:
DATE FILED: 06/26/2012
CLASS PERIOD START: 10/20/2010
CLASS PERIOD END: 10/24/2011
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Labaton Sucharow LLP
    140 Broadway, Labaton Sucharow LLP, NY 10005
    212.907.0700 212.818.0477 · info@labaton.com
No Document Title Filing Date