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High FCAU stock price may frustrate lawyers

by David Zatz on

At least two legal firms have filed class action suits against Fiat Chrysler, claiming that the executives lied about recalls and safety, thereby depressing the stock price.

VW Volkswagen dieselThis claim appears to have been based on the stock-price plunge which occurred at around the same time as the researchers discovered that Volkswagen/Audi diesel engines were set to falsify emissions tests. Millions of Volkswagens, Audis, Skodas, and SEATS are being recalled and analysts expect heavy financial consequences.

At Fiat Chrysler, there were issues with internal reporting programs that have been discovered, and that is the basis for the lawsuits. So far, no nefarious intent has been found or claimed by the U.S. government.

FCAU-October-15

Even as the Volkswagen scandal broke, union negotiations started up with the UAW, possibly also lowering the stock price as some prepared for a strike or a deal which would greatly increase labor costs.

The stock price went back past $16.30 today, far above the roughly $13 price per share when the lawsuits were filed. The plaintiffs’ cases may be somewhat cramped by the rise in FCA stock, which accompanied a general market rise and the discovery that FCA does not appear to have rigged emissions testing. The stock started out at under $9 per share when FCA was created. Yahoo Finance shows that the stock price is currently above average for the company, and that most buyers are now ahead of the game.

David Zatz founded Allpar in 1998 (based on a site he had begun in 1993-94), after years of writing reviews for retail trades. He has been quoted by the New York Times, the Daily Telegraph, the Detroit News, and USA Today. Before making Allpar a full-time career, he was a consultant in organizational psychology. You can reach him by using our contact form (much preferred) or by calling (313) 766-2304

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