A class action lawsuit has been filed against Adidas by its shareholders, citing that the sportswear company had prior knowledge of Kanye West’s controversial statements and behavior long before it terminated its association with him for his antisemitic remarks.
According to The Guardian, Adidas failed to take adequate measures to mitigate the losses suffered by its shareholders or shield them from any possible risks after the discontinuation of West’s Yeezy brand, which resulted in a significant decline in the company’s stock value.
Meanwhile, Kanye West, also known as Ye, is not part of the lawsuit filed by the Adidas shareholders.
Adidas Routinely Ignored Kanye West Behavior, Shareholder Claim
Adidas shareholders filed a lawsuit in Oregon on Friday, accusing the company and its top executives, CFO Harm Ohlmeyer and former CEO Kasper Rorsted, of disregarding Kanye West’s negaative behavior, The Hill reported.
The lawsuit highlights previous incidents, such as West’s controversial remarks in 2018, where he suggested that slavery was a “choice.”
Adidas responded to the issue by expressing disagreement with West’s comments but reiterated that he was an essential component of their strategy and a creative force.
Moreover, the lawsuit alleges that Adidas only terminated its association with West after facing widespread criticism for failing to do so earlier.
Following the termination of its partnership with Kanye West, Adidas investigated various allegations against him, including reports of mistreatment of staff and instances of forcing them to view explicit material.
The investigation was launched only a few weeks after the company cut ties with the rapper.
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Adidas Stock Decline After Ending Ties With Kanye West
Rolling Stone noted that Adidas suffered a significant setback in November 2022, when its stock price plummeted after severing ties with Kanye West.
Although the stock eventually regained some ground, the company’s shares plummeted once again in February 2023, when it revealed to its investors that the failure to sell Yeezy’s stock (valued at $1.29 billion) would lead to an equivalent decrease in company revenue and projected an operating loss of 700 million euros in 2023 if the inventory was not repurposed.
The plaintiffs seek damages for themselves and other members of the class who have suffered due to the alleged wrongful conduct, with the exact amount to be determined at trial.
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