Stellantis N.V., the multinational automaker, is facing a lawsuit from its own shareholders in the United States. The lawsuit, filed in Manhattan federal court, accuses Stellantis of engaging in fraudulent practices by concealing rising inventory levels and other financial weaknesses, which ultimately led to disappointing earnings and a subsequent drop in its stock price.
The lawsuit alleges that Stellantis deliberately inflated its stock price throughout much of 2024 by making overly optimistic statements about its inventory management, pricing power, new product launches, and operating margins. The complaint states that these statements were false and misleading, painting a rosier picture of the company’s performance than reality.
The shareholders are seeking unspecified damages from Stellantis for the period between February 15 and July 24, 2024. Notably, the lawsuit names both Stellantis CEO Carlos Tavares and CFO Natalie Knight as defendants.
The allegations stem from Stellantis’s first-half 2024 earnings report, which revealed a significant decline in net revenue and adjusted earnings per share (EPS). Net revenue dropped by 14% year-over-year to 85 billion euros, while adjusted EPS fell by 35% to 2.36 euros. This disappointing performance caused the company’s stock price to plummet. Adjusted operating income (AOI) also declined by 40% to 8.5 billion euros, mainly driven by decreases in the North American market. The operating income margin dropped by 440 basis points to 10%, falling below the company’s full-year target of a double-digit margin.
Stellantis has denied the allegations, issuing an emailed statement to Reuters stating that the lawsuit is “without merit” and that the company intends to vigorously defend itself against these claims.
Despite the lawsuit, Stellantis shares were trading up 0.95% premarket on Friday, reaching $15.99 at the last check.
