A group of shareholders has filed a lawsuit against Stellantis in the United States, claiming the European-American automaker defrauded them by concealing rising inventory levels and other weaknesses before announcing disappointing earnings, causing its share price to fall.
According to the lawsuit filed Thursday in federal court in Manhattan, Stellantis artificially inflated its stock price for much of 2024 by making “overwhelmingly positive” estimates about inventory levels, pricing power, new products and operating margin.
The true situation came to light on July 25, when Stellantis announced adjusted operating profit for the first half of the year, down 40 percent to 8.46 billion euros (9.28 billion dollars), below the 8.85 billion euros expected by analysts.
“This lawsuit is without merit and the company intends to defend itself vigorously,” Stellantis said in an emailed statement to Reuters.
Stellantis also announced that its adjusted operating profit margin fell below its double-digit annual target.
Shares listed in the US fell by $1.94, or 9.9 percent, to $17.66 on the two trading days following the announcement.
Also named as defendants are CEO Carlos Tavares and CFO Natalie Knight.
Stellantis was formed in 2021 from the merger of Fiat Chrysler and the French group PSA. Its 14 brands include Alfa Romeo, Citroen, Dodge, Jeep, Maserati, Opel, Peugeot, Ram and others.
In the United States, it is common for shareholders to sue companies when their share prices fall unexpectedly.
The lawsuit, filed on Thursday, seeks damages of an unknown amount for shareholders from February 15 to July 24, 2024.
A lawyer for the shareholders did not immediately respond to requests for comment.
Stellantis shares closed 1.7 percent higher at $15.84 in New York on Thursday.
Last week, Stellantis announced that the company could cut up to 2,450 jobs at its truck assembly plant in suburban Detroit as production of the Ram 1500 Classic truck ends.
The case is Long v. Stellantis NV et al., U.S. District Court, Southern District of New York, No. 24-06196.
)
