Benzinga - While it’s not uncommon for Hollywood productions to go haywire, Netflix Inc. (NASDAQ:NFLX) has reportedly invested $55 million on a project that may never see the light of day. Of which, $11 million was invested in stocks and cryptocurrency by a filmmaker who is now at odds with the streaming giant.
What Happened: Netflix is currently engaged in a “confidential arbitration” process initiated by the filmmaker Carl Erik Rinsch, claiming that the company breached the contract and owed him at least $14 million in damages. Netflix has denied such claims, reported The New York Times.
It all started when Cindy Holland, Netflix’s VP of original content at the time, decided to win the auction for Rinsch’s proposed project — a science fiction series based on artificial humans.
This TV series named “Conquest” has resulted in a massive loss of money, time, and energy for Netflix because, to date, the streaming giant hasn’t received a single finished episode. It is also at the center of this dispute.
See Also: Netflix Options Trading: A Deep Dive into Market Sentiment
As per the report, Netflix had already paid $44 million to Rinsch when he requested additional funds from the company in March 2020. While Netflix was reluctant to provide more funding, they agreed after the filmmaker suggested that the entire project might collapse without the additional cash injection.
However, instead of putting the money into production, Rinsch transferred $10.5 million of the $11 million that Netflix wired into his brokerage account at Charles Schwab and placed bets on the stock market, the report noted, citing copies of his bank and brokerage statements presented during his divorce case.
And, within weeks, he lost $5.9 million.
In March 2021, after Holland’s exit and management overhaul at Netflix, the streaming platform informed the filmmaker about their decision to stop funding “Conquest.”
They also told him he could take the project elsewhere, but the acquirer must reimburse the company investment. Rinsch wasn’t happy, to say the least.
Interestingly, he started using what remained of the $11 million that Netflix paid him to buy cryptocurrencies.
He bought Dogecoin (CRYPTO: DOGE) for more than $4 million — but unlike his luck with stocks, by May 2021, his Dogecoin investment resulted in nearly $27 million, the report noted.
Rinsch then bought five Rolls-Royces, a Ferrari, a Vacheron Constantin watch, expensive, high-end furniture, and designer clothes. The filmmaker claimed later during his divorce proceedings that this shopping was for the production of “Conquest” and was done with the money Netflix wired. However, during the arbitration case with Netflix, he changed his positioning and claimed that the money was contractually his.
Notably, Netflix won the deal to produce Rinsch’s science fiction project after beating rival Amazon Inc., which had already reached an informal eight-figure agreement with the filmmaker. Now, it appears Amazon might have dodged a bullet without even realizing it.
Read Next: Will Netflix Become The Next King Of Gaming?
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.