Netflix shareholders filed a lawsuit against the streaming giant on Wednesday. The shareholders accused the company’s management of fraud by giving misleading information about subscriber growth, leading to a plunge in its stock price.

Filed in San Francisco, the lawsuit argues that the streaming service has failed to disclose that it is “losing subscribers on a net basis.” Unaware of Netflix’s inability to retain customers, the plaintiffs claim to “have suffered significant losses and damages.”

Last month, Netflix reported losing nearly 200,000 subscribers in the first quarter of 2022. The largest streaming service also said it expects to lose two million more in the coming months. As a result, within hours of trading the company’s shares dropped by 25%. Overall, Netflix’s capitalization has decreased by 40% this year.

The collapse of the company’s value has forced Netflix’s executives to consider creating more affordable subscription tiers by adding a version of the streaming platform with ads.

-RT