NEW YORK — Stellantis has been sued by U.S. shareholders who say the European-American automaker defrauded them by hiding rising inventories and other weaknesses before reporting disappointing earnings that sent its stock price tumbling.
The complaint filed Thursday in U.S. District Court in Manhattan said Stellantis artificially inflated its stock price for much of 2024 by making “overwhelmingly positive” assessments about inventory, pricing power, new products and operating margin.
Shareholders said the truth came out on July 25, when Stellantis reported that first-half adjusted operating profit fell 40% to 8.46 billion euros ($9.28 billion), below the 8.85 billion euros analysts had expected.
“This lawsuit is without merit and the company intends to defend itself vigorously,” Stellantis said in an emailed statement to Reuters.
Stellantis also said its adjusted operating profit margin fell below its double-digit target for the full year.
Its U.S.-listed shares fell $1.94, or 9.9%, to $17.66 in the two trading sessions after the announcement.
CEO Carlos Tavares and CFO 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 US after unexpected drops in stock prices.
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 possible 2,450 layoffs at a truck assembly plant in suburban Detroit, where production of the Ram 1500 Classic pickup truck is being phased out.
The case is Long v Stellantis NV et al, U.S. District Court, Southern District of New York, No. 24-06196.