STMicroelectronics N.V. (STM) is a multinational semiconductor manufacturer headquartered in Geneva, Switzerland. Founded in 1987, STM has been publicly traded since 1994 and is listed on the New York Stock Exchange, Euronext Paris, and Borsa Italiana in Milan.

The majority shareholder of STM is STMicroelectronics Holding N.V., a private company in which the Italian Government has a 50% stake.

It designs, develops, manufactures, and sells semiconductor integrated circuits and discrete devices. The company's products are utilized across various industries, including automotive, telecommunications, consumer electronics, and industrial applications. STM generates most of its revenue from chip sales, with a significant portion coming from the Automotive and Industrial sectors.

Between March 14, 2023, and October 30, 2024, STM and its executives engaged in misleading financial practices by making false and/or misleading statements that covered key aspects of its business activity such as demand forecasts, inventory levels, and the company’s financial outlook in general.

Throughout this period, STM assured investors that demand for semiconductor chips remained strong, that its backlog (i.e. unfulfilled orders that had yet to be processed or shipped to customers) could sustain the company for the following quarters, and that it was effectively managing inventory. However, the reality was starkly different. Demand for STM’s chips had already begun declining sharply in early 2023, leading to an accumulation of excess inventory at distributors and end customers, while STM struggled to accurately forecast future sales.

In order to continue to show financial stability (which was only apparent), STM engaged in an opaque scheme (neither explained nor illustrated to the market), offering excessive discounts to artificially boost short-term sales figures while creating long-term financial instability. These deceptive practices became apparent when STM was forced to revise its financial guidance multiple times.

Starting from April 25, 2024, STM slowly began to announce worse-than-expected financial results and revised its previous revenue targets, lowering its long-term projections from over $20 billion annually to a range of $14–$15 billion.  This information given to the market, however, was not sufficient to unveil the extent of the false information given to the market in STM’s previous communications, starting with the statements of STM's CEO (Mr. Jean-Marc Chery) made on March 14, 2023, at Citi's European TMT Conference.

On July 25, 2024, STM made a new downward revision of 2024 revenue guidance to $13.2–$13.7 billion, triggering a 17% drop in stock price in following two trading days, as analysts began to sense that the company's outlook might have been overstated by STM.

The final blow came on October 31, 2024, when STM disclosed that the semiconductor market downturn was expected to continue into 2025 and that it expected to finish FY 2024 with $13.27 billion in revenues, i.e. on the lower end of the (already-reduced) range disclosed on July 25, 2024, resulting in a new 6,4% drop in the stock price in the following three trading days. In any case, the ninety-day window that followed that final disclosure led to a further 15% drop of STM's stock value.

Regulatory and Legal Allegations

Investigations into STM’s financial disclosures suggest that the company systematically misled investors by failing to disclose critical risks and engaging in deceptive financial practices, with STM executives concealing the true state of semiconductor demand, overstating the company’s backlog strength, and misrepresenting its inventory management. Despite having internal knowledge of deteriorating market conditions, STM’s leadership repeatedly provided reassurances that contradicted actual financial realities.

Our Proposal

Martingale Risk is organizing a collective action in the Netherlands to support investors who suffered financial losses due to STM’s misleading disclosures and financial misstatements. The initiative will focus on holding STM accountable and securing the best possible recovery for affected investors. The legal strategy will involve an extra-judicial negotiation with STM and/or participation in legal proceedings in the Netherlands to recover losses suffered by shareholders. We will operate on a full contingent fee basis of the recovered amount, with no anticipated costs, fees or expenses for the clients.

Investors who purchased STM common stock between March 14, 2023, and October 30, 2024, may be eligible to participate and seek compensation for their losses.

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