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Adidas’ partnership with Ye has become a massive liability — and a group of investors are saying they should’ve known better.
Investors filed a class-action lawsuit against Adidas alleging the company had prior knowledge of the issues with Ye, formerly known as Kanye West, that led to the dissolution of their partnership last October.
The suit claims Adidas executives “intended to deceive” investors about the risk of partnering with Ye and failed to limit their financial exposure to the partnership. Adidas ended its relationship with Ye after the rapper publicly made a series of antisemitic remarks and said on a podcast, “I can say antisemitic things, and Adidas can’t drop me.”
Cutting ties with Ye cost Adidas $633 million in fourth-quarter sales, per the company’s Q4 earnings report. It could also lead to a $1.27 billion hit in 2023 from failure to sell existing stock.
The lawsuit points to a Wall Street Journal report from November stating that company executives raised concerns about Ye four years prior to cutting ties.
Adidas CFO Harm Ohlmeyer and former CEO Kasper Rørsted are named as defendants, and the suit covers anyone who bought Adidas stock from May 3, 2018 — when Ye made troubling remarks about slavery — to 2023.
The company denied allegations made in the suit, telling CNN, “We outright reject these unfounded claims and will take all necessary measures to vigorously defend ourselves against them.”
