Volkswagen was expecting everyone would find its dumb “Voltswagen” April Fools’ joke about changing its name funny. We’re sure it didn’t expect a class-action lawsuit over their silly joke. Unfortunately, nobody thought it was funny. But some obviously thought it was worth a lawsuit. Now there is one over the poor judgment. of Volkswagen.
The plaintiff Gerald M Montag says he purchased securities once he heard about the Voltswagen change. He says the securities were artificially inflated because of the name change news. Montag also felt it worth suing Volkswagen Chief Executive Officer Scott Keough and Acting Head of Communication Mark Gilles.
The lawsuit alleges Volkswagen made false and/or misleading statements
The lawsuit wraps in any “persons or entities who purchased or otherwise acquired publicly traded Volkswagen Securities between March 29, 2021; and March 30, 2021.” It alleges that Volkswagen made false and/or misleading statements and/or failed to disclose the “Voltswagen” change was a “joke.” “We might be changing out our K for a T, but what we aren’t changing is this brand’s commitment to making best-in-class vehicles for drivers and people everywhere,” is how Keogh phrased it.
Here’s a typical story from CNBC explaining the change: “Volkswagen accidentally posted a press release on its website a month early on Monday announcing a new name for its U.S. operations, Voltswagen of America, emphasizing the German automaker’s electric vehicle efforts. A person familiar with the company’s plans confirmed the authenticity of the release to CNBC. They asked to remain anonymous because the plans were not meant to be public yet.”
Volkswagen even went further according to carcomplaints. It claimed it planned to keep the dark blue on its logo for gas-powered vehicles but go with light blue for “the new EV-centric branding.” Then it went on parsing the use of the name as an “operating unit of Volkswagen Group of America.”
The CEO of Volkswagen even got into the “Voltswagen” act
The CEO of Volkswagen even got into the act. Here’s a quick statement he released earlier in the debacle, “We might be changing out our K for a T, but what we aren’t changing is this brand’s commitment to making best-in-class vehicles for drivers and people everywhere.” Ha, ha!
After the Associated Press announced the phony change it had to rebut the story with a statement. It read, “The Associated Press was repeatedly assured by Volkswagen that its U.S. subsidiary planned a name change, and reported that information, which we now know to be false. We have corrected our story and published a new one based on the company’s admission. This and any deliberate release of false information hurts accurate journalism and the public good.”
Volkswagen officially says it saw no influence on the stock market
The Volkswagen class-action lawsuit says the damage came from when ADRs fell $2.14 per ADR. That fall is more than 5% over the next two full trading days. It closed at $35.58 per share on April 1, 2020, allegedly damaging investors. Volkswagen’s response to the lawsuit is that it couldn’t “see any influence on the stock market price as a result of the advertising campaign.”
The lawsuit was filed in the US District Court for the Central District of California titled, “Gerald M Montag Vs. Volkswagen AG, et al.