Netflix Directors Downplayed ‘Headwinds,’ Low Growth, Suit Says

Nextflix Inc. co-founder and co-CEO Reed Hastings and other members of the board breached their fiduciary duties to the company by making misleading statements that hid “decelerating” growth, a shareholder says in a derivative suit in federal court in California.

Subsequent quarterly reports showing weak subscription sign-ups in January and April 2022 led to stock-price implosions of 22% and 35%, respectively, stockholder Judith Ormerod says. That caused financial, reputational, and other harm to the company, she says in her complaint filed Tuesday in the US District Court for the Northern District of California.

The directors failed to disclose “significant headwinds” ...