New York, New York--(Newsfile Corp. - May 17, 2023) - Pomerantz LLP is investigating claims on behalf of investors ofadidas AG("adidas" or the "Company") (OTCQX: ADDYY). Such investors are advised to contact Robert S. Willoughby at newaction@pomlaw.com or 888-476-6529, ext. 7980.
The investigation concerns whether adidas and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
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In the fall of 2022, musical artist Kanye West, Adidas's design partner for the Company's popular Yeezy shoe, made a series of overtly anti-Semitic and racially offensive remarks in public. On October 25, 2022, following mounting public pressure, Adidas canceled its partnership with West.
Then, on November 27, 2022, The Wall Street Journal published an article entitled "Adidas Top Executives Discussed Risks of Staff's 'Direct Exposure' to Kanye West Years Ago." The article revealed that Adidas's leadership, including Chief Executive Officer Kasper Rørsted, had discussed the risk of the Company continuing a relationship with West as early 2018, citing the artist's often erratic and controversial behavior.
On this news, Adidas's American depositary receipt (ADDYY) ("ADRs") fell $2.20 per ADR, or 3.13%, to close at $62.34 per ADR on November 28, 2022.
Then, on February 9, 2023, Adidas warned that the Company could shift from a profit to a loss if it failed to sell its inventory of Yeezy shoes following the termination of its partnership with West. Specifically, the Company stated that it expected sales to fall at a high single-digit rate in currency-neutral terms because of the "significant adverse impact of not selling the existing stock" of Yeezy products. Failure to sell the stock of Yeezy's (valued at 1.2 billion euros) would accordingly lower Company revenue by 1.2 billion euros (or about $1.29 billion), and operating profit by 500 million euros."
On this news, Adidas's ADR price fell $7.4 per ADR, or 8.96%, to close at $75.16 per ADR on February 9, 2023.
Finally, on February 21, 2023, S&P Global announced that it was downgrading Adidas to "'A-/A-2' From 'A-1' On Deteriorating Credit Metrics; Outlook Negative." S&P largely attributed the downgraded to the financial impact of the termination of Adidas's partnership with West.
On this news, Adidas's ADR price fell $3.56 per ADR, or 4.62%, to close at $73.59 per ADR on February 21, 2023.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See www.pomlaw.com.
CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
888-476-6529 ext. 7980
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