5 ms·

You always sue for more than you think you deserve to win, that's just how that works. Why lowball yourself? The real indicator is share-price being up 2% afte

You always sue for more than you think you deserve to win, that's just how that works. Why lowball yourself? The real indicator is share-price being up 2% after the ruling. The investors think J&J got off easy.

koolba 7y ago
Certainty alone is worth a bump in share price.
- Judgmentality 7y ago
  But it has to override the impact of the ruling. I'm pretty sure if they'd been fined the full $17 billion that the share price would have declined quite a bit.
JMTQp8lwXL 7y ago
Only if J&J gets no further judgments after this one.
- henryfjordan 7y ago
  The market had already priced in all the future judgments, it's not like these lawsuits are a secret.
  - dragonwriter 7y ago
    > The market had already priced in all the future judgments The market has already priced in what it anticipates the future judgements will be (but that expectation may be wrong; for instance it could be $0—in which case GPs only if there are no future judgements is literally correct—but there may turn out to be substantial future judgements.) If the market had already priced in all future events, the price would never move.
    - dllthomas 7y ago
      > If the market had already priced in all future events, the price would never move. I don't think that holds. Let's say we all knew everything about the future, and we all use it to instantaneously and perfectly compute The Right Price for every security. We all know that this stock will pay out a total of $X in dividends over the next Y years before the company goes out of business, and what all the future prices will be. Time moves forward, we pass a dividend payment. I think the price of the stock has to fall?
      - JMTQp8lwXL 7y ago
        But since you know everything about the future, you already know that the company will pay future dividends. That would be instantaneously priced in to your perfect information scenario.
        deleted 7y ago
        [deleted]
        dllthomas 7y ago
        The dividend payment isn't unexpected - we all knew it would happen on that day. But since it's in the past now instead of the future, the stock is going to be paying out ($X - $d) instead of $X in what remains of the company's life.
  - JMTQp8lwXL 7y ago
    There could be follow-up judgments that don't behave as the market would expect, and move the price. The opioid epidemic has a long and complex history. I'm not too sure this is the legal end of it for them.
Bud 7y ago
They did get off easy. This is about 3% of J&J's annual profit. I guarantee you they are ordering hookers, blow, and cases of Dom Pérignon in the J&J boardroom after this.
- robocat 7y ago
  > This is about 3% of J&J's annual profit What % of profits made by J&J in Oklahoma? Presumably the risk is that other states could decide that this could be a good way to get income too?
- adrianmonk 7y ago
  It's also only for cases in Oklahoma. Oklahoma has under 4 million people, and the US has over 300 million, so it's about 1.2% of the US population. If you extrapolate and assume similar settlements in 49 other states, that would come out to 250% of their annual profits. Which may not happen, but the point is that 3% should be viewed in some kind of perspective.
- refurb 7y ago
  Opioids are a very small proportion of J&J’s sales. I wouldn’t calculate it based on their entire portfolio of cancer drugs.
dllthomas 7y ago
> The investors think J&J got off easy. Easy relative to the (amount weighted?) balance of probability. The stock price doesn't speak to whether they got off easy or hard relative to what's just.

koolba 7y ago

Certainty alone is worth a bump in share price.

Judgmentality 7y ago
But it has to override the impact of the ruling. I'm pretty sure if they'd been fined the full $17 billion that the share price would have declined quite a bit.

JMTQp8lwXL 7y ago

Only if J&J gets no further judgments after this one.

henryfjordan 7y ago
The market had already priced in all the future judgments, it's not like these lawsuits are a secret.
- dragonwriter 7y ago
  > The market had already priced in all the future judgments The market has already priced in what it anticipates the future judgements will be (but that expectation may be wrong; for instance it could be $0—in which case GPs only if there are no future judgements is literally correct—but there may turn out to be substantial future judgements.) If the market had already priced in all future events, the price would never move.
  - dllthomas 7y ago
    > If the market had already priced in all future events, the price would never move. I don't think that holds. Let's say we all knew everything about the future, and we all use it to instantaneously and perfectly compute The Right Price for every security. We all know that this stock will pay out a total of $X in dividends over the next Y years before the company goes out of business, and what all the future prices will be. Time moves forward, we pass a dividend payment. I think the price of the stock has to fall?
    - JMTQp8lwXL 7y ago
      But since you know everything about the future, you already know that the company will pay future dividends. That would be instantaneously priced in to your perfect information scenario.
      - deleted 7y ago
        [deleted]
      - dllthomas 7y ago
        The dividend payment isn't unexpected - we all knew it would happen on that day. But since it's in the past now instead of the future, the stock is going to be paying out ($X - $d) instead of $X in what remains of the company's life.
- JMTQp8lwXL 7y ago
  There could be follow-up judgments that don't behave as the market would expect, and move the price. The opioid epidemic has a long and complex history. I'm not too sure this is the legal end of it for them.

Bud 7y ago

They did get off easy. This is about 3% of J&J's annual profit. I guarantee you they are ordering hookers, blow, and cases of Dom Pérignon in the J&J boardroom after this.

robocat 7y ago
> This is about 3% of J&J's annual profit What % of profits made by J&J in Oklahoma? Presumably the risk is that other states could decide that this could be a good way to get income too?
adrianmonk 7y ago
It's also only for cases in Oklahoma. Oklahoma has under 4 million people, and the US has over 300 million, so it's about 1.2% of the US population. If you extrapolate and assume similar settlements in 49 other states, that would come out to 250% of their annual profits. Which may not happen, but the point is that 3% should be viewed in some kind of perspective.
refurb 7y ago
Opioids are a very small proportion of J&J’s sales. I wouldn’t calculate it based on their entire portfolio of cancer drugs.

dllthomas 7y ago

> The investors think J&J got off easy. Easy relative to the (amount weighted?) balance of probability. The stock price doesn't speak to whether they got off easy or hard relative to what's just.