Netflix woes continue, this time from angry investors with a class-action suit
The terrible summer and fall that Netflix had in 2011 seemed to have turned as poor decisions were reversed, new deals were made, and the fallout over price increases had passed. As 2012 begins, Netflix faces a new threat: its own investors.
A lawsuit filed in U.S. District Court in Northern California, by the City of Royal Oak Retirement System, on behalf of “all plaintiffs similarly situated” claims that the online and mail-order movie delivery service failed to disclose crucial information to them before raising prices dramatically. They were also left unaware that some of the content distribution contracts held with studios were being renegotiated at substantially higher costs.
Stocks closed on Friday at under $100, down from nearly $300 in early July, 2011.
