In This Story
Stellantis is being sued by its U.S. shareholders. They allege the automaker defrauded them by concealing rising inventories and other issues before posting disappointing earnings. Those disappointing earnings caused the stock price to fall.
The complaint, filed on August 15 in Manhattan federal court, argued that Stellantis artificially inflated its stock price for much of 2024 by making “overwhelmingly positive” assessments about inventories, pricing power, new products and its operating margin. From Reuters:
Shareholders said the truth came out on July 25 when Stellantis STLA+2.35% said first-half adjusted operating income fell 40% to 8.46 billion euros ($9.28 billion), below the 8.85 billion euros that analysts expected.
“This lawsuit is without merit and the company intends to vigorously defend itself,” Stellantis STLA+2.35% said in an emailed statement to Reuters.
Stellantis also said adjusted operating income margin had fallen below its double-digit full-year target.
Its U.S.-listed shares fell $1.94, or 9.9%, to $17.66 in the two trading days after the announcement.
Chief Executive Carlos Tavares and Chief Financial Officer Natalie Knight are also defendants.
Stellantis was created in 2021 from the merger of Fiat Chrysler and France’s PSA. Its 14 brands include Alfa Romeo, Citroen, Dodge, Jeep, Maserati, Opel, Peugeot, Ram and others.
Reuters says it’s fairly common for shareholders to sue companies in the U.S. after unexpected stock price declines. The lawsuit is seeking unspecified damages for Stellantis shareholders between February 15 and July 24 of this year.
A version of this article originally appeared on Jalopnik’s The Morning Shift.