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Published October 20, 2024
STMicroelectronics is a global semiconductor company, so management should know the importance of precision and getting things right. But when STM recently botched the job on its financial outlook and got the numbers all wrong, its share price lost 15% just in one day. Shareholders are now suing the company in an attempt to recoup their losses.
In late 2023, STM executives provided investors and analysts with a glowing financial update. Executives played up the Company’s strong margins and revenues, supposedly driven by strong automotive and communications segments. In reality, Company executives knew demand for STM products was declining and causing revenues and margins to shrink too.
Investors and analysts were stunned when, in April 2024, STM executives revealed the truth: shaky automotive and communications segments caused STM’s margins and revenues to shrink, and overall sales declined almost 20% from the prior year.
After this revelation, investors lost confidence and began dumping STM stock and signing up for the class action lawsuit that was later filed.