Stellantis, US shareholders sue company

Stellantis is being sued by shareholders in the US, who allege that the carmaker 'misled' them by hiding stock increases and other data, before publishing disappointing financial results that caused its share price to fall. Reuters reported this, specifying that the complaint - filed on Thursday 15 August - alleges that Stellantis artificially inflated its share price for much of 2024 by making 'extraordinarily positive' assessments of stock, pricing power, new products and operating margin. The lawsuit expressly names CEO Carlos Tavares and CFO Natalie Knight. The case is Long v. Stellantis NV and others, United States District Court, Southern District of New York, No. 24-06196. "This lawsuit is without merit and the company intends to vigorously defend itself," Stellantis said. In essence, the French-Italian carmaker, born in January 2021 from the merger between Psa and Fca, believes that the action brought is without legal basis or sufficient evidence to justify the allegations.

In the US it is common for shareholders to sue companies after an unexpected drop. In this case the plaintiffs claim that the truth emerged on 25 July, when the group led by Tavares published its second quarter accounts. Adjusted operating profit for the first half of the year had fallen by 40 per cent to EUR 8.46 billion, below the EUR 8.85 billion expected by analysts, 'due,' the company had explained, 'essentially to the decrease in North America'. Net profit was EUR 5.6 billion, down 48% from the same period last year, 'mainly due to lower volumes and mix, less favourable exchange rates, and restructuring costs'. Net revenue of EUR 85 billion had decreased by 14%.

After the late July announcement of quarterly and half-year results, Stellantis shares on Wall Street had lost 9.9 per cent in two sessions, settling at $17.66. The lawsuit mentions unspecified damages for shareholders between 15 February and 24 July 2024. In reality, the Stellantis share is down 32% in 2024 and, above all, has almost halved in value between March and current prices, falling from a capitalisation of USD 85 billion to USD 46 billion (share price at USD 15.8). Immediately after the first-quarter accounts, the group had risen to third place in terms of value, after Tesla and Toyota. Today it is thirteenth, after India's Tata Motors and the new entry Xiaomi. Among the causes were difficulties on the US market, with dated models that did not meet demand (e.g. Ram 1500 Classic and Jeep Cherokee), and, precisely, financial results below expectations.

Stellantis closed today's session positive (+1.92%) in Italy on the back of a rebound in Piazza Affari, back above 33,000 points, due to the return of confidence on the main European stock exchanges thanks to recently better-than-estimated US data. Less effervescent was the trend on Wall Street, with the stock weak and on the edge of parity.

Last week Stellantis said it would lay off 2,450 workers from a production plant in Michigan as the automaker plans to end production of the Ram 1500 Classic at the end of this year. The decision came as the parent company's market share in the United States shrinks, dealers complain about rising inventories, and the automaker prepares to launch battery-powered models to compete with rivals. The layoffs could start as early as 8 October and the actual number could be lower if some workers move to other plants.