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£35 would be a nice entry lovely jubly
There are over 400 cases. Also, check what happened to GSK in the US with Zantac.....no wonder investors are worried. ii estimate the risk from "0", to $2-8bn. A very wide range and both highlights the risk and uncertainty. 2 things institutional investors don't like. If the $60mn cases doesn't get overturned....expect a further almighty crash. So, why take a risk on this stock? Just sell now and buy when the case gets overturned. No brainer
Don’t be buying any yet, we need possitive news to start and see a bottom appear in this graph. This could continue down to
If we wait and hear of a 2nd case that is when I’m making my decision on selling, as this could be it, though we’re told there over 100.
It could grow now that the judge has voted in favour of the customer.
Can’t really compare this, even thinking of pharma companies
Interesting perspective - however my understanding is the case was against Mead Johnson USA- the subsidiary - hence would the jury not have thought the defendants were American
Might buy a few in here when it drops even further. Nice and tasty cheap as chips!
I was recently thinking about investing here... perhaps it's as well I didn't...i don't know how the SP will fare going foreward but this case will cast a cloud over it.. rightly or wrongly.. and whilst it looks tempting to buy now I have decided to leave well alone and look elsewhere..
In 1999. As argued here at the time, the Mead deal looked like a bad case of a chief executive trying to buy growth at a moment when the revenue line was temporarily sticky.
On the day the takeover was announced, Reckitt’s share price was £71. Now it is £45.75, the lowest since 2013. Not all the woes can be pinned on Mead – margins elsewhere have also been a problem – but its distraction factor has been immense. The soon-to-be chair Sir Jeremy Darroch, a former BSkyB boss, will have to explain to frustrated investors why Reckitt deserves to exist in current form: the brands in both the hygiene and health divisions wouldn’t struggle to find buyers.
Reckitt – who knows? – may yet escape its litigation battle with minimal or tolerable financial impact, which is how life seems to be turning out in the US for GlaxoSmithKline with its heartburn drug Zantac. But Monday’s modest 2% bounce in Reckitt’s shares reflects the new mood of heightened uncertainty. Neither moral of this tale counts as new. First, when previously successful companies engage in bet-the-farm acquisitions, shareholders should ask more questions. Second, don’t pay the chief executive £97m before his handiwork can be judged.
High risk guys - be aware
He worst acquisition by a major UK company in the last decade? It’s hard to think of a deal that beats Reckitt Benckiser’s $18bn purchase in 2017 of Mead Johnson Nutrition, a US-listed maker of baby milk formula. Shares in the Dettol-to-Durex group have never recovered from the shock. By way of add-on award, Rakesh Kapoor, Reckitt’s chief executive back in the day, can probably scoop the prize for most overpaid FTSE 100 boss of recent times: he departed two years after his fateful piece of deal-making having been paid the astonishing sum of £97.6m during his eight years in charge.
The latest example of Mead Johnson’s dreadful legacy was Friday’s news that a court in Illinois awarded $60m in damages to a woman whose premature baby died in intensive care after consuming the company’s Enfamil formula; the allegation was that Reckitt failed to warn adequately that feeding with infant formula increased the risk of necrotising enterocolitis (NEC). The verdict knocked 15%, equivalent to £5.4bn, off Reckitt’s stock market value as investors tried to guess what could follow from 400-odd similar NEC-related cases involving Mead and its US rival Abbott Laboratories.
Reckitt stands by the safety of its products and will appeal in Illinois, arguing the jury verdict was “not supported by the science or experts in the medical community”. Management spent Monday trying to reassure the City. But, as so often with US legal cases, outsiders take little for granted in the early stages. Barclays analysts think Reckitt’s appeal chances are “reasonable” and that £2bn of damages would be an “absolute worse case”. Over at Jefferies, they opted for imprecision and said the risk is anywhere between zero and £8bn-plus.
Investors are making a fortune from UK healthcare. Why is nobody holding private equity to account?
David Rowland
Read more
For the time being, then, Reckitt as an investment is a play on litigation risk. Management’s narrative about “rejuvenation” and higher profit margins from brands such as Cillit Bang and Finish has become the secondary story.
It would have been different without Mead Johnson. The 2017 deal looked overpriced at the time since Reckitt was paying about 29 times earnings, and it demonstrably became a waste of money when Kapoor’s successor announced a £5bn writedown on the carrying value only three years after purchase. That mostly related to the Chinese operation where Reckitt had to admit it overestimated birthrates and consumers’ loyalty to local brands; it sold the unit on cut-price terms a year later.
Kapoor’s mistake was to rip up Reckitt’s previous winning strategy of bolt-on purchases that could be slotted smoothly into the sales machine. Nurofen painkillers and Durex condoms arrived that way under old boss Bart Becht, who (aside from being paid megabucks himself) turned the old Reckitt & Colman into a sensational stock market performer after merger with Dutch firm Benckis
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Barclays concluded a realistic worst-case scenario was a few thousand plaintiffs settling in “the high hundreds of thousands of dollars per case”. An extreme worst-case scenario they calculated would result in £2bn of damages.
Your right so many companies listed many doing good but it’s a gambling stock that’s top share price that’s messed up this is a light hearted dig not meant to over serious but true
Driftking27 "We live in a messed up world ‘Clued ‘ just have to accept this sub standard quality of life."
I certainly realise that the current World is messed up and have to accept things on one level, but I
don't find shoddy careless, even
negligent, mistakes like the
USD60b reported by Reuters
instead of USD60m acceptable. If someone erred like that working for me they'd have to have a very good explanation to keep their job. This error has probably crashed the price by multiples more than it should have and caused many stop losses to trigger thus causing exagerated financial losses. The more that these errors are simply "accepted" without negative consequences for those who make them, then the lower that standards fall as we see in society generally. Even Kate Midleton was caught posting a 'fraudulent' photo of herself and children, and I accept well intentioned and in itself not that important, but it has started a huge debate on what is fake and what is not after Reuters, who also made the mistake here !!!, asked for the Royal photo to be withdrawn !!
RKT has another 400+ cases behind the USD60m awards one so could be 400 x USD60m .... ???
Another GSK-type scenario ?
Didn`t realise the case was from years ago. What cause did the death certificate state ? I dont believe it woud say NEC due to feeding of toxic babymilk. Unfortunate that the baby died, but this is nature and not all survive. Cant see hospitals stopping feeding premature babies with this formula as it save a lot of early babies lives. I would be questioning the Judge`s ability more than anything as this case is one sided. See what the appeal comes up with as it is a worldwide issue for baby milk manufacturers.
I think you know what I meant to say-the first line could do with tidying up such as "we know now that the 3 week old baby that died was one of twins born at 32 weeks"
The earlier reporting seemed to indicate that this was maybe a sole birth?
Cheers
Apparently one of the twins died; the other is now 4 years old and presumably OK. Whilst the article in the ST doesn't give all the facts it stated that the births happened at 32 weeks (8 weeks preterm).
The babies would have had to remain in hospital until they were deemed OK to go home. The formula was obviously given to them whilst in hospital.
The (weaker?) twin died after 3 weeks with NEC. I'm not a medic but the assumption has to be that at this point at what amounted to 35 weeks out of a 40 week normal pregnancy term both babies would still have been under the medical supervision of the hospital/s. I'm wondering given that NEC has been known about for yonks why the medics haven't also been sued?
Keep trying to post but keeps crashing on me but after speaking again in-depth with my daughter no way NEC caused by milk formula. My now 13 year old beautiful tall strapping granddaughter is proof mead Johnson formula works she would have and did nearly die today she’s out horse riding NEC is what you develop or more often born with not caused by milk no matter brand as for the crash well it happens but personally don’t think it should have think RKT must have had poor legal team or though they’d win and not put to much effort in to lose all I’ve got say is thank you otherwise I wouldn’t have my beautiful granddaughter Olivia so thanks mead Johnson
Apparently it's being looked into why 60 billion instead of 60 million fine was reported. Bots exacerbated the drop. All a bit naughty, hedge funds at it?
Glad I topped up at 4300p on Friday. Going back up to 5000p+ tomorrow.
Before posting a comment, get your facts right before wasting our time reading the $60bn.
If you had the screed on our message board you would have read that one certain site maybe two had posted incorrect numbers by 1000 times out.
REUTERS is the best site to use in my view.
The person writing that article needs a kick up the back side fir saying $60bn
We live in a messed up world ‘Clued ‘ just have to accept this sub standard quality of life.
Stockmarket indices are even out of sync, DOWJ & S&P at record highs when the world economy is the opposite in line with the VIX.
But do we want to hit that reset button, certainly no… we keep going .. it’s so fake the markets when we take a step back abd look at everything..
Then we have TRUMP v BIDEN debate .. it’s a joke if that’s the best USA can offer.
So, I’d take everything out of USA literally as like that!
Rant over
Correction to my last post which stated a USD60b award which I read from an Alliance News bulletin. The correct figure is USD60m and after reading up on this case, there may be at least another 400 cases following this depending upon the Appeal presumably which increases the risk.
Shouldn't Reckitt have a warning on the tin that the formula can cause this NEC as they'd then be covered ? Or at least highly recommend a doctor's assessment before giving to a baby ? Can't understand some of these businesses and how their very highly paid "so-called competent" managers get to the top positions !!
What I find fascinating is that an award of USD60b is made at all against a business which currently has a Market Cap of UKP37b = c USD47b. I know that initial award figures in the US could feature in a Monty Python show, but such an award could question the judge's mental ability. Theoretically, apart from a credible view that no baby is worth USD60b (I certainly wasn't !!), if the amount was to be paid, and I don't believe it will, then the whole business would have to be
liquidated first with the loss of thousands of jobs and GBPbillions to shareholders and IRS. Thus no one baby is worth that much !! So
I ask, why would damages at that level be awarded at all, why not a more reasonable amount that is deemed acceptable. A black guy was released from prison in the US recently and he had spent c 48
years in prison for a murder he had not done. He is to receive USD175,000 for wrongful imprisonment !!
Just remember, this food formulae has been sold not just a year or two, but since 1959
Enfamil, introduced in 1959, has undergone several significant formulations — each one designed to optimise nutrition. With over a century of innovation behind it, Mead Johnson Nutrition strives to be the world's leading provider of science-based paediatric nutrition products.
Some group, fund feels confident after placing a big order at £34m at after hours.
Has to be a BUY, as they would’ve seen so plummet.
Hopefully as others have said this will leap back up on Monday.
17:55:15 4,486.00 747,925 Unknown* £34m
Thought FF would be either jetting of to Dubai or racing around in their Ferrari than on here haha
GLA
On a separate issue, my former wife gave birth to my beautiful twin daughters in Santa Monica in the late'80s. As is usual for twins, they were premature, by slightly over a month. From the moment her pregnancy was confirmed until my daughters were walking, the pre and post natal care was exemplary. Of course, it was stressed that breast milk is the ideal nutrition, but many mothers, especially with multiple births, with the best will in the world, struggle to produce sufficient milk. But new-born babies and especially pre-matures need nutrition, and if the mother is struggling, formula is pretty much the only option. My girls seemed to favour Enfamil, so that's what they lived on until they could tolerate cows' milk. My point is - infant formula is not breast milk. Everyone knows it's a compromise. It's down to the paediatric team to indicate and monitor its use, especially in compromised babies. If there is a case to answer, it should be focussed on the care protocols, not the highly researched and developed product which has undoubtedly saved millions of young lives over the decades.