A proposed class action lawsuit looks to represent those who bought or otherwise acquired Volkswagen stock during the two days in March in which the automaker, as part of a marketing campaign, claimed it would change its name to “Voltswagen.”
The 21-page securities case centers on an April Fools’ Day stunt for which Volkswagen issued on March 29 a “draft” press release that stated the automaker would change its name to “Voltswagen,” an announcement that, according to the complaint, multiple news outlets reported that they had confirmed with company insiders was real. The lawsuit alleges Volkswagen AG, Volkswagen Group of America and the company’s CEO and acting head of communications issued between March 29 and March 30, 2021 “materially false and misleading statements” that financially injured stockholders.
On March 29, CNBC was among the outlets who reported that Volkswagen had “accidentally leak[ed]” on its website the new name for its U.S. operations, the lawsuit says. CNBC’s report cited “[a] person familiar with the company’s plans” in confirming “Voltswagen,” a purported symbol of Volkswagen’s commitment to “future-forward investment” in electric vehicles, as the new name, according to the suit. That same day, USA Today, the case continues, also confirmed the apparent “name change,” stressing in part that Volkswagen “was not hacked” and that the announcement was “not a joke” or mere marketing ploy. USA Today’s report, the suit adds, noted that the “Voltswagen” name change would serve to further distance VW from the diesel emissions scandal that “sullied its reputation, harmed the environment, hurt public health and led to penalties of more than $30 billion as well as criminal charges.”
Volkswagen of America on March 30 re-published the same press release, titled “Voltswagen, A new name for a new era of e-mobility,” alongside the following tweet, the lawsuit says:
“We know, 66 is an unusual age to change your name, but we’ve always been young at heart. Introducing Voltswagen. Similar to Volkswagen, but with a renewed focus on electric driving. Starting with our all-new, all-electric SUV the ID.4 – available today. #Voltswagen #ID4”
The lawsuit alleges, however, that the statements the defendants made with regard to the so-called “Voltswagen” name change were “materially false and/or misleading” because “Voltswagen,” in truth, was never going to be used by the automaker, and that Volkswagen and its spokespeople “purposefully misled reporters” about the “joke” and/or “promotion.”
Per the complaint, the truth began to emerge when the Wall Street Journal published late on March 30, two days before April Fools’ Day on April 1, a “news exclusive” titled “No, Volkswagen Isn’t Rebranding Itself Voltswagen: German car maker says announcement by its U.S. operation was supposed to be an April Fools’ gag[.]” The article stated, in pertinent part, that “a spokesperson for the parent company in Germany later said the move was a joke,” the suit reads. According to the WSJ’s article, VW ran into issues in that “everyone took it seriously, creating confusion about the company’s intentions and moving the shares, putting VW’s communications team on the defensive,” the case relays.
Reports began to surface on March 31 about how Volkswagen and its spokespeople had “purposely hoodwinked” journalists, including reports from the Associated Press, USA Today, CNBC and the Washington Post who were unaware that VW’s initial “press release” was false, according to the suit.
Upon this news, Volkswagen shares fell more than five percent over the next two full trading days, damaging investors, the lawsuit says.
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