STMicroelectronics Denies Insider Trading Amid Political Tension

STMicroelectronics, a prominent European semiconductor manufacturer, has vehemently denied allegations of insider trading involving two members of its management committee. The company's supervisory board issued a statement on Thursday, asserting that stock transactions during the blackout period were executed automatically by the company's equity plan administrator. This response comes after Italian Economy Minister Giancarlo Giorgetti accused the management of selling shares just a day before the release of negative financial results.

The controversy surrounding STMicroelectronics deepened as Giorgetti also expressed opposition to the continued tenure of Jean-Marc Chery, the company's current CEO. The Italian and French governments, through a holding company, jointly hold a 27.5% stake in the semiconductor manufacturer. This political tension adds another layer of complexity to the company's current challenges.

In addition to the insider trading allegations, STMicroelectronics is also facing a class-action lawsuit in the United States. The lawsuit alleges that the company misled investors by concealing its operational status. The supervisory board has stated that it has prepared "sufficient defense arguments" for this legal battle, indicating a proactive approach to addressing the allegations.

The semiconductor industry, particularly in Europe, is currently grappling with a sluggish automotive and industrial market. STMicroelectronics, during its second-quarter financial report conference in 2024, significantly lowered its annual performance guidance. This "cliff-like" reduction, as described by analysts, led to a sharp decline in stock prices. The company further lowered its performance expectations in October 2024, marking the third time that year, and subsequently delayed the release of its 2025 performance targets in January 2025. The company has yet to specify when these performance targets will be provided, adding to the uncertainty surrounding its future prospects.