Allegations Dismissed by Supervisory Board

In a bold move, the supervisory board of STMicroelectronics quashed claims of insider trading on Thursday, focusing the spotlight on two members from the European chipmaker's management.

A Day of Controversy

This announcement came just a day after Italy’s economy minister, Giancarlo Giorgetti, accused the company's leadership of selling shares right before reporting disappointing results. Such timing raises eyebrows and invites speculation.

Automatic Stock Sales Explained

STMicroelectronics responded directly, clarifying that the stock sales in question were executed by their stock plan administrator through an automated process during the company’s designated blackout period.

Political Tensions Surrounding Leadership

Giorgetti did not stop there; he further expressed the Italian government's disapproval of STMicro's CEO, Jean-Marc Chery. This adds a layer of political tension, given that the Italian and French governments collectively hold 27.5% of the company through a holding entity.

Class Action Lawsuit Looms

As if that wasn’t enough, STMicro is now grappling with a class action lawsuit in the U.S., accusing them of deceiving investors by omitting crucial details about the company's performance. However, the supervisory board maintains they have a solid defense lined up.

Navigating a Market Downturn

The backdrop of these allegations is a tough landscape for European chipmakers like STMicro, who are currently experiencing a slump, particularly in the automotive and industrial sectors.

Earnings Reports Show Troubling Signs

During STMicro's second-quarter earnings report for 2024, analysts were shocked by what one described as a "massive" cut to their annual guidance—an adjustment that sent stocks tumbling.

Ongoing Uncertainties in Projections

With further downgrades announced in October, STMicro postponed its 2025 targets this January, leaving investors anxious and uncertain about the company's future plans.