Adidas Sued by Shareholders for Ignoring Kanye West Behavior

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 actions and statements long before it terminated its association with him for his antisemitic remarks, according to The Guardian.

As per the allegations, 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.

"We outright reject these unfounded claims," Adidas stated as part of its official response to the complaint, saying that they will take all necessary steps to defend themselves against their shareholders.

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 repeated displays of extreme conduct, 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.

Adidas Stock Dropped After Breaking Up with Kanye West

Adidas suffered a significant setback in November 2022, when its stock price plummeted after severing ties with Kanye West, per Rolling Stone.

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.

According to the lawsuit, Adidas' top executives recklessly disregarded the truth. They artificially inflated the company's stock price by concealing the risks associated with their association with Kanye West.

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.

During Paris Fashion Week in October 2022, Kanye West presented a show in which models donned "White Lives Matter" t-shirts, a slogan deemed to be associated with white supremacy, which emerged in response to the Black Lives Matter movement, as noted by the Anti-Defamation League.

Later that same month, West faced consequences for making antisemitic comments, resulting in suspending both his social media accounts.

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Written by: Bert Hoover

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