Peach Farm Lawsuits and Stock Prices
Farmer Bill Bader from Missouri just had his peach orchard destroyed by an incoming mist of ‘dicamba herbicide.’ The chemical compound is produced by pharma player, Bayer, and splashed around by Bayer’s agrochemical partner in crime, Monsanto.
The two companies merged in 2018, selling developed seeds to farmers with a maximized yield and a minimized cost. However, it’s not been a smooth ride since then. Investors are counting up over a quarter-billion-dollars’ worth of damages for this latest incident alone, courts insisting that “no giant is too big to follow the law.”
Farmer Bill complained in court that life sciences giant Bayer said it “didn’t have the manpower” to make it out to his St. Louis farm to inspect his trees, despite employing 110,787 people. Tut-tut. But not far from 5-year lows, investors have put Bayer on trial for a whole lot more controversies.
There are thousands of additional claims piling up for ruined crops, soybeans, and cotton. The company is accused of hiding the safety risks of a birth control device, and cities are mad about how Bayer’s contaminated waterways with banned toxic chemicals.
By far the biggest headline-grabber, however, concerns the firm’s flagship weed killer, ‘Roundup.’ A groundskeeper’s hose broke last year, and pesticide drenched him from head to toe. Ever since his cancer diagnosis, Bayer’s been scrambling to finance a $10 billion settlement!
Bayer’s stock price will dive further if the government deems its Monsanto deal to be an evil meets evil merger. Both companies make up an industry of only five, and with consolidation rife, five doesn’t divide kindly by two. Dow and DuPont have already consolidated, and Syngenta was Monsanto’s initial partner of choice before Bayer came knocking. If the companies are broken up, and Syngenta-Monsanto becomes real, Bayer’s the small fish!
Bayer’s stock price will look more peachy, however, if the negative media frenzy has unduly overblown fears about damage to demand going forward, or what these lawsuit losses mean for its financial future. An 800-million-dollar legal fee only makes a stock go up if investors were expecting a one-billion-dollar legal fee. It’s all about what fortune tellers dare to price in!
