Johnson & Johnson plans to repurchase $5 billion in shares after the company lost more than $50 billion in market value over two trading days following a scathing news report Friday.
knew for decades its talc baby powders contained asbestos and failed to disclose it. The article drove J&J’s shares down 10 percent for the day. It shaved nearly $40 billion from its market value in what was their worst trading day in more than 15 years. The shares lost another 2.9 percent Monday.
In total, J&J lost more than $50 billion over the two trading days.
“Based on our continued strong performance and, more importantly, the confidence we have in our business going forward, the Board of Directors and management team believe that the company’s shares are an attractive investment opportunity,” CEO Alex Gorsky said in a statement.
Nearly 12,000 lawsuits accuse J&J’s talc baby powder of causing mesothelioma, ovarian and other types of cancers. Some juries have sided with J&J and others have been unable to reach verdicts. A Missouri jury in July ordered J&J to pay $4.69 billion in a case involving 22 women and their families. A judge affirmed the verdict in August, and J&J vowed to appeal it.
The company has strongly denied the allegations in the Reuters story and has vigorously defended its talc baby powder.
CEO Alex Gorsky told customers in video posted on its website and social media Monday that J&J stands behind its product. He said if it wasn’t safe, it wouldn’t be on store shelves. J&J has also started running ads in newspapers and on news websites with the tagline, “Science. Not sensationalism.”
The company said repurchases may be made at any time and were at management’s discretion.