Netflix Has Investor Lawsuit Thrown OutBy: Chris Crum - August 22, 2013
A class action lawsuit filed against Netflix by investors was thrown out this wee, as the judge found that the plaintiffs did not “plead plausible facts”. Netflix filed a motion to have the case thrown out earlier this year, and have now had that wish granted.
The suit claimed that Netflix has misled investors in relation to the company’s shift from DVDs to a streaming model (both of which are still offered, of course). The way the judge see it it, Netflix was not misleading. Deadline has the legal document, which says:
The Court dismissed Plaintiffs’ CCAC because it found that (1) Plaintiffs’ accounting arguments were not plausible; (2) Defendants’ statements about the virtuous cycle were not false or misleading; (3) Defendants did not mislead their customers about streaming’s profitability; (4) none of Defendants’ statements about the pricing changes were false or misleading; and (5) Defendants’ correspondence with the SEC was not actionable. The Court gave Plaintiffs leave to amend their complaint to plead new facts supporting their allegation that Defendants made false or misleading statements during the Class Period.
Netflix posted its quarterly earnings last month. Q2 streaming revenue was up 26% domestically and 155% internationally, year-over-year. Here’s a look at revenues and profits from both streaming and DVD:
Image: Netflix Investor Relations<