Shareholders in the United States have reportedly sued Stellantis N.V. STLA, accusing the automaker of fraud by hiding rising inventories and other weaknesses, leading to disappointing earnings and a subsequent drop in its stock price.
The lawsuit, filed Thursday in Manhattan federal court, alleges that Stellantis artificially boosted its stock price throughout much of 2024 by offering “overwhelmingly positive” statements about inventories, pricing power, new products, and operating margins, reported Reuters.
The lawsuit, filed on Thursday, seeks unspecified damages for Stellantis shareholders from February 15 to July 24, 2024. Chief Executive Carlos Tavares and Chief Financial Officer Natalie Knight are also named as defendants, per the report.
In July, Stellantis reported first-half 2024 net revenue of 85 billion euros, down 14% Y/Y, and adjusted EPS declined 35% Y/Y to 2.36 euros, which caused the stock to drop.
Adjusted operating income (AOI) declined by 40% Y/Y to 8.5 billion euros, primarily due to decreases in North America. The margin declined by 440 bps to 10%.
Stellantis disclosed that its adjusted operating income margin had dropped below its double-digit full-year target.
The company said in an emailed statement to Reuters, “This lawsuit is without merit and the company intends to vigorously defend itself.”
Read: Stellantis US Recalls Plug-In Hybrid Minivans Due to Fire Risks
Price Action: STLA shares are up 0.95% at $15.99 premarket at the last check Friday.
Photo by Jonathan Weiss on Shutterstock
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