NEW YORK, (Reuters) – Stellantis has been sued by shareholders in the United States who said the European-American automaker defrauded them by concealing rising inventories and other weakness, before posting disappointing earnings that caused its stock price to fall.
The complaint filed on Thursday in Manhattan federal court said Stellantis artificially inflated its stock price for much of 2024 by making “overwhelmingly positive” assessments about inventories, pricing power, new products and operating margin.
Shareholders said the truth came out on July 25 when Stellantis 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 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.
It is common for shareholders to sue companies in the United States after unexpected stock price declines.
Thursday’s lawsuit seeks unspecified damages for Stellantis shareholders between Feb. 15 and July 24, 2024.
A lawyer for the shareholders did not immediately respond to requests for comment.
Stellantis shares closed up 1.7% at $15.84 on Thursday in New York.
Last week, Stellantis announced a potential 2,450 layoffs at a suburban Detroit truck assembly plant, where production of the Ram 1500 Classic truck is ending.
The case is Long v Stellantis NV et al, U.S. District Court, Southern District of New York, No. 24-06196.
Reporting by Jonathan Stempel in New York; Editing by Stephen Coates
