Johnson & Johnson lost $39.8 billion in market value Friday after Reuters said the company knew for decades that its baby powder contained asbestos, an allegation the company denied.
J&J said the story was "one-sided, false and inflammatory" and an "absurd conspiracy theory," according to a statement.
Thousands of lawsuits have accused J&J's talc-based baby powder for containing asbestos and causing ovarian and over types of cancers. Investors have expressed some concern over the lawsuits, though J&J has successful won a number of cases.
Friday's report spooked the Street and drove J&J's shares down 10.04 percent to close at $133 a share, losing about $39.8 billion of it market value. J&J now has a market capitalization of $356.7 billion. The shares recovered somewhat after tumbling as much as 11.9 percent in intraday trading.
Analysts viewed the sell-off as overdone. Wells Fargo called Friday's moves "excessive." J.P. Morgan called them an "over-reaction."
Wells Fargo's Larry Biegelsen said in a note to clients even if J&J settled all 11,700 cases for $280,000 each, the highest per case settlement amount among the cases it has followed, the total liability would be $3.3 billion. J.P. Morgan's Chris Schott echoed Biegelsen, saying J&J's exposure to the legal risk probably won't come close to the amount J&J lost in market value Friday.
from Top News & Analysis https://ift.tt/2rxOVdQvia IFTTT
No comments:
Post a Comment