According to a Reuters report, on August 15, automaker Stellantis was sued by its U.S. shareholders. The shareholders filing the lawsuit allege that the company concealed unfavorable conditions, such as rising inventory levels, deceived shareholders, and subsequently reported disappointing profit results, leading to a decline in the company's stock price.
The lawsuit claims that throughout most of 2024, Stellantis artificially inflated its stock price by making "extremely optimistic" assessments of inventory, pricing power, new products, and operating profit margins. It should be noted that Stellantis CEO Carlos Tavares and CFO Natalie Knight are also named as defendants in the case.
The shareholders stated that they became aware of the true situation on July 25. On that day, Stellantis released financial results showing that its adjusted operating profit for the first half of the year had fallen by 40% year-over-year to €8.46 billion (approximately $9.28 billion), below analysts' expectations of €8.85 billion. In the two trading days following the release of the half-year report, Stellantis' U.S. stock price dropped by 9.9% to $17.66. The lawsuit seeks compensation for damages suffered by Stellantis shareholders between February 15, 2024, and July 24, 2024.
In response, Stellantis stated in an email that "the lawsuit is without merit, and the company intends to defend itself vigorously." The company also noted that its adjusted operating profit margin had already fallen below its double-digit full-year target. According to Reuters, in the U.S., it is common for shareholders to file lawsuits following unexpected declines in corporate stock prices.
A lawyer for the Stellantis shareholders did not immediately respond to a request for comment on the report. On August 15, Stellantis' U.S. stock price closed up 1.7% at $15.84.
