HAGENS BERMAN

Date Filed: January 13, 2012
Lead Plaintiff Deadline: March 13, 2012
Class Period: December 20, 2010 - October 24, 2011
Court: U.S. District Court
Location: California
Ticker Symbol: NFLX

Hagens Berman today is investigating Netflix (NASDAQ: NFLX) regarding claims made in a filed securities class-action lawsuit, including alleged insider selling by corporate executives.

Investors who purchased shares of Netflix common stock between Dec. 20, 2010, and Oct. 24, 2011 (the “class period”), and have lost more than $500,000 are encouraged to contact Partner Reed R. Kathrein at (510) 725-3000. Mr. Kathrein is leading Hagens Berman’s investigation. Investors can also email the firm at NFLX@hbsslaw.com.

The securities class-action lawsuit was filed in the United States District Court for the Northern District of California on Jan. 13, 2012. The complaint alleges that Netflix violated federal securities laws by making false and misleading statements to investors during the class period.

Specifically, the lawsuit claims that Netflix knew its short-term contracts with content providers were likely to expire or be so costly to renew that the company would be forced to raise its prices, but failed to timely disclose these details to investors.

On July 12, 2011, Netflix announced that it was raising prices for some subscribers, and on July 13, 2011, the company announced a new multi-year agreement with NBC Universal. Following the news, Netflix stock closed at $298.73 per share.

The company then announced on Sept 15, 2011, that it was updating its third quarter 2011 guidance, disclosing that it had lost a million subscribers following the price increases. On this news, Netflix stock price declined by nearly 19 percent, closing at less than $170 per share.

On October 24, 2011, the company disclosed to shareholders a net loss of more than 800,000 subscribers. Netflix stock fell again, closing at $80.86 on Oct. 27, 2011.

According to the class-action complaint, Netflix executives sold over $90 million worth of the company’s stock during the class period. The lawsuit alleges that CEO Reed Hastings sold 190,000 shares for $43.2 million. The deadline to move the court for lead plaintiff status is March 13, 2012.

Whistleblowers

Persons with knowledge that may help the investigation are encouraged to contact the firm. The SEC recently finalized new rules as part of its implementation of the whistleblower provisions in the Dodd-Frank Wall Street Reform Bill. The new rules protect whistleblowers from employer retaliation and allow the SEC to reward those who provide information leading to a successful enforcement with up to 30 percent of the recovery.