5 reasons J&J shares plunged this week
Over the course of the past seven trading days, Johnson & Johnson, the American health care company, saw its shares plunge more than 13 percent.
|JNJ||JOHNSON & JOHNSON||158.51||+0.32||+0.20%|
Even as executives at the company struggle to turn around a decline started by an explosive Reuters report that alleges the company knew its iconic and ubiquitous baby powder contained cancer-causing asbestos, J&J has been plagued by additional financial setbacks.
Here are five reasons why the stock has fallen so much:
1. Last Friday, Reuters published a shocking report that J&J didn’t tell the Food and Drug Administration about at least three tests by three different labs from 1972 to 1975 that found asbestos in its talcum powder, in one case at levels reported as “rather high.” In response, J&J lambasted the Reuters article as "one-sided, false and inflammatory" in a statement published on its website. J&J lost a whopping $40 billion in value as a result.
2. Less than one week after the report was published, the company lost its motion to reverse a jury verdict that awarded $4.14 billion in punitive damages and $550 million in compensatory damages to a group of women who said the baby powder caused their ovarian cancer.
3. India ordered J&J to stop using the raw material it has been using to produce its baby powder until tests prove that it’s free of asbestos, according to Reuters. Indian drug authorities also reportedly visited some of J&J’s facilities and took “tests and samples” of its talc powder.
4. Likewise, Bangladesh plans to collect and test samples of the company’s baby powder, following the report, according to Reuters.
5. J&J began settling lawsuits in which consumers claimed the company sold artificial hips, even though it knew they were defective. It marks the first settlements in the seven-year-old litigation, according to Bloomberg, which first reported the news. About 3,300 of 10,000 cases have either been settled, or are in the process; it could reportedly cost J&J about $400 million.