Netflix has been vilified and criticized to no end in recent months, and now things just took another turn for the worse. A group of the company’s shareholders have filed a class action suit against the company alleging that Netflix mislead investors in order prop up its share price.
Netflix Chief Executive Officer Reed Hastings, Chief Financial Officer David Wells, Chief Content Officer Ted Sarandos, Chief Marketing Officer Leslie Kilgore, and Chief Product Officer Neil Hunt were named as defendants in the suit. The plaintiffs are seeking unspecified damages and attorney’s fees, and are claiming that Netflix executives sold off more than $90 million worth of company stock when the shares were priced high.
From the suit:
“Later, when the defendants’ prior misrepresentations and fraudulent conduct became apparent to the market, the price of Netflix common stock fell precipitously, as the prior artificial inflation came out of the price over time,”
Do you think that Netflix’s executives deliberately mislead investors so that they could cash out while the sun still shone brightly on the company? How do you think this lawsuit will turn out for the accused?
(via The Wrap)
I believe the CEO and others had no idea what would happen after the price increase mess. I sure AFTER the prices went way down was the only way they would sell, Frankly I would have done the same thing as the ship was going down.
The thing is they sold BEFORE prices went down. People have been suspecting for a while that the stock prices are being manipulated. The drop was seen as a way for them to recoup some of the sold stock at bargain prices. That’s getting a little into conspiracy range however.
I still am baffled as to why the streaming price was $7.99, with an additional $2 for one DVD out at a time. The latter was just a gift if you ask me. This was the first mistake Netflix made.
It really is too bad, they had such a solid business model and service, until everything went to shit.
They need to go back and fix is. The money they got for selling when they know what was about to happen is as crooked as they come . Yes bad people get greeded and we the custmer get the short end of the stick . They should all go to jail and sell all there asst’ off . They should go back to the old way
If they are found guilty I imagine the SEC will get involved. That usually ends badly. The customers will lose if it comes to that I’m sure because an SEC probe would rock the foundations of the company.
Two words: insider trading.
No. Ambulance chasing law firms file this stuff and settle it for a nickel. The lawyers will get 1/3 of that and 2/3 will go to the shareholders who will pocket almost nothing.
‘The first thing we do is kill all the…’