Volkswagen could end up in hot water during its “Voltswagen” marketing stunt

But here’s the problem: People took the first false statement about the name change seriously.

Wall Street analysts have even published advice on what such a change could mean for the automaker. Strategic direction. Wedbush analyst Dan Ives said in a note to investors Tuesday morning that such a name change “underscores VW’s clear commitment to its EV brand,” and went on to detail the market opportunity for them. electric vehicles in the United States, Europe and China in the coming years. years.

“It’s a great illustration of the power of media and the need to be very careful with what you say because you can never know what will or will not move a market,” said Jonathan Richman, Partner of the law firm Proskauer. “From Volkswagen’s point of view, it was meant to be fun, but one person’s fun could be another person’s profit or loss.”

“Is the SEC going to inquire? Well, sure, they will,” Whitehead said. “It has received enough publicity and people are concerned about it and there are issues as to whether or not companies should be doing this, I’m sure. [the SEC is] will make a call. “

A representative from Volkswagen headquarters said on Wednesday afternoon that the company had not been contacted by the SEC. The agency declined to comment on the matter.

If the SEC were to investigate the “Voltswagen” stunt, Whitehead said, it would likely consider whether the statement was intended to manipulate the company’s stock price or whether shareholders would consider a name change (or the fact that the name change was a joke) to be important information. Making either statement could be tricky.

“I don’t know that just changing the name, or not changing the name for that matter, will be considered important… I don’t think it gets to that level,” Whitehead said. “These are all kinds of gray areas, which is why a responsible business does not go this route.”

Richman added: “To prove a claim you have to prove intent, which means there was a conscious or at least reckless disregard for the truth here. I imagine if this was really meant to be a joke. April Fool’s Day, it’s going to be very difficult to prove that Volkswagen intended to cheat the market. “

For its part, Volkswagen of America declared that it “saw no influence on the stock price as a result of the advertising campaign”.

“That was not and is not the purpose of the campaign,” Volkswagen of America said in a statement Wednesday to CNN Business. “This is an advertising measure as part of the market launch of the ID.4 and the push for electric mobility in the United States.”

But in the case of the “Voltswagen” statement, “there was nothing to indicate … that – nudge, nudge, wink, wink – it’s really a joke, unlike the other gags that have been out there, ”Whitehead said.

In fact, the company included some pretty specific details in the name change statement about what the change would mean, including that it would use “Voltswagen” on the chrome badges on the back of its electric vehicle. (It doesn’t.) And it didn’t help that the statement announcing the alleged name change didn’t include reference to April Fool’s Day – and it landed two days before the holidays.

Regarding the timing of the declaration, Volkswagen of America said that it “has had a comprehensive social media and marketing campaign on our electric mobility plans that needs to be rolled out” between the time of the change declaration. by name and April 1, “when we were to announce that it was a joke.”