Stellantis Shareholders File Lawsuit Amid Cratering Profits
Stellantis’s Operating Income Plummets by 40% in First Half of 2024
Stellantis, the multinational automotive company, has experienced a significant decline in operating income during the first half of 2024. The company’s financial results have raised concerns among shareholders, who accuse Stellantis executives of overstating assessments prior to the release of the results.
Shareholders Take Legal Action Against Stellantis
A group of shareholders has filed a lawsuit against Stellantis in the Southern District of New York. The lawsuit alleges that the automaker concealed surging inventories and other flaws, leading to financial losses for shareholders.
Potential Elimination of Unprofitable Brands
Stellantis CEO Carlos Tavares has warned that underperforming brands within the group may face elimination. This statement comes as the company grapples with poor financial performance and the need to streamline its operations.
Financial Disclosure Reveals Earnings Decline
In a press release on July 25, 2024, Stellantis disclosed its financial outcomes for the first half of the year. The company attributed a significant decline in earnings to poor margins and elevated inventory levels in its U.S. operations.
Lawsuit Alleges Artificial Inflation of Stock Price
The lawsuit filed by Levi & Korsinsky on behalf of shareholder Steven Long claims that Stellantis artificially inflated its stock price by providing overwhelmingly positive assessments about inventories, pricing power, new products, and operating margin. However, when the financial results were released, it was revealed that adjusted operating income had fallen by 40% to €8.46 billion ($9.28 billion).
Stellantis Shareholders Can Join the Lawsuit
Stellantis shareholders who incurred a loss between February 15, 2024, and July 24, 2024, have the option to join the lawsuit by submitting a claim before October 15, 2024. The lawsuit names CEO Carlos Tavares and CFO Natalie Knight as defendants.
Stellantis Responds to Lawsuit
In response to the lawsuit, Stellantis stated that it believes the claims are without merit and intends to vigorously defend itself against the allegations.
Challenges Faced by Stellantis
Stellantis has been facing numerous challenges in recent months. The company has seen the departure of several executives and has been involved in legal disputes with suppliers over price hikes. Additionally, CEO Carlos Tavares has warned that unprofitable brands within the group may face elimination if they fail to turn a profit.
