Monsanto — an agritech company Bayer acquired in June — owed California school groundskeeper Dewayne Johnson $289 million in damages as per a state court ruling in San Francisco, California
Monsanto announced plans to appeal the court’s decision, but that couldn’t stop Bayer’s shares from plunging 12 percent on Monday, the equivalent of roughly $14 billion in value.
In March 2015, the International Agency for Research on Cancer (IARC), an agency within the World Health Organization (WHO), determined it is “probably carcinogenic in humans.”
Carcinogenic or not, Monsanto’s glyphosate-containing products are still widely available, and that might not be in Bayer’s best interest if it loses its appeal of the California case. Johnson’s lawsuit is one of about 5,000 like it, and they could just keep coming as long as Monsanto’s glyphosate products are on the market.
If each of those existing lawsuits returns the same verdict as Johnson’s, Bayer could owe a whopping $1.45 trillion in damages — more than enough to bankrupt a company with a market cap around $104 billion.
But if just a single ruling in favor of the plaintiff was enough to cut Bayer’s value by 12 percent, Bayer may not need 5,000 verdicts to see some pretty substantial damage.
The Roundup trial in San Francisco, which will directly address whether product has caused cancer, is the first of its kind.
Reference- Futurism, Wall Street Journal, Reuters