Why Johnson & Johnson Stock Slipped by Nearly 4% on Monday
News of a legal defeat drove Johnson & Johnson's (NYSE: JNJ) share price down on the first trading day of the week. The ruling from a federal appeals court not only went against the company, it produced headlines about one of the worst scandals in its history. As a result, the stock lost 3.7% of its value across the day, which compares unfavorably to the 1.3% decline of the S&P 500 index.
That morning, the Third U.S. Circuit Court of Appeals quashed Johnson & Johnson's strategy of essentially moving around 38,000 individual lawsuits into bankruptcy court. In 2021 the healthcare giant formed a subsidiary, LTL Management, to effect such a move. LTL Management contains its baby powder business.
This tactic has been used successfully in other legal proceedings by name companies. Johnson & Johnson's effort fell well short, however, as the decision against the company by the court was unanimous.
Source Fool.com
