DANG Bayer’s stock price crashed.
Since the Johnson trial, I’ve kept a close ear on what analysts and investors are whispering about Bayer and the litigation. More often than not, I’ve found investors continuing to give the benefit of the doubt to Bayer. Some even encourage a “Buy” while arguing that the prices are undervalued, because Johnson and now Hardeman are just isolated events.
Credit Suisse teamed up with Bayer to support and execute the acquisition of Monsanto, including an immensely successful bond offering to help finance the acquisition. (If anyone can send me a copy of that roadshow presentation, shown to potential investors to parade the merits of the offering and acquisition, please do because I think it will be quite revealing.)
Sadly for innocent mutual fund investors looking to save for their retirements, CEO Werner Baumann and his eager lineup of institutional investors failed to understand the liability presented by glyphosate litigation – it is not and never has been equivalent to that of other individual pharma products. This chemical exposure isn’t limited to a handful of people; it is impacting the entire globe.
When I worked as an investment banker, there was a sentiment that the bigger the deal the better. I’m certain that working on the extremely complex legal and financial aspects of this transaction were thrilling, like a conquest, and sparked major competitiveness among senior bankers to successfully pull off the M&A (Merger and Acquisition) deal of the decade.
Financial analysts and bankers do not typically give much weight to the voices and concerns of environmental activists in executing deals – and this transaction is no different. Baumann and Credit Suisse ignored what all of us have been saying – this product is making people SICK. But not just small-time sick – dying of cancer sick.
Even though Bayer did set aside a small amount of funds for litigation settlements for Monsanto liabilities, did anyone on the transaction team think to look and see what else this chemical is doing? Didn’t ANYONE think – wow, the growth of several diseases and the introduction of the mega use of Roundup on food seem so strangely correlated. Or, perhaps it’s unsustainable to have struggling farmers fully dependent on Monsanto technology? Or, Moms Across America tested vaccines and found alarming levels of glyphosate in them – that could be bad down the line if they do end up causing disease.
Lets face it, Bayer – you were screwed, and now you know it. Monsanto must have known what was coming and pulled the ejection lever just in time to retire into a life of leisure. My question is: Did Credit Suisse know as well, but advise you to pay no mind to the impending litigation in order to get spectacular payouts from the deal and a tractor-shaped lucite trophy for their desks?
Bayer took out a full-page ad in the Wall Street Journal today to tell the deliberating jury, and maybe also tell investors, that Roundup is safe. So much is untruthful in this ad – anyone who has been following the trial will second me on that:
As I have said many times, the cancer trials are just the tiny tip of the iceberg of the liability that will crash down around Bayer over the next few years. And that’s just surrounding human health – the dolphins, bees, butterflies, and lymphoma-laden puppies have beef too. Though that isn’t as likely to show up in the stock price.
I have so much more to say on the financial transaction. I am sure that it will eventually be a case study in business schools and law schools around the world, much like ENron was when I was in business school. But this story is so much more engaging and will ultimately be analyzed and dissected for years to come.
Today, while sitting through EXTREMELY boring, redundant video testimony, I was paging through my notes from Friday. I realized that it was not Plaintiff attorney Wisner who asked Donna Farmer about animal intestinal damage from the surfactant, but rather the Monsanto attorney! Shouldn’t Monsanto know better than to ask a question that could ignite such extreme concern in the jury and, well, humanity in general? I’m shocked.
In the unavoidable upcoming litigation regarding Roundup’s murder of our microbiome and hole punching of our intestines, that deposition from Donna Farmer will not fly well with a jury.
The courtroom is considerably less tense today. The audience is dwindling down quite a bit, and it’s back to a leaner collection of attorneys, the core handful of journalists, and some individuals of unknown affiliation.
I’ll be brief because, frankly, this trial was over after Donna Farmer’s deposition. Today’s depositions include Monsanto employees Bill Heydens, Larry Kier, Sam Murphey, Michael Koch and Hugh Grant. None added a whole lot more to the story, but here are a few notes on Heydens:
Deposition of Dr. Bill Heydens – Monsanto Chief of Regulatory Science
- Wears colorful patterned ties that look like they could be from Liberty of London
- Calls the Williams 2000 paper an invaluable asset
- Denies ghostwriting the Williams paper in a myriad of ways
- In considering strategy to promote glyphosate, he wrote “how [do] we get people to get up and shout glyphosate is non-toxic.”
- His eyes look really intense and frightened when Monsanto attorney asks about the mouse and rat regulatory studies. Yes, the Magic Tumor study.
We learn that in an email, Heydens presented his “Scientific Outreach Plan” to spread the word on the safety of Roundup. He includes the following 4 points:
GG Conclusion – Heydens seems shifty and the emails shown during deposition made him seem even more so. He teamed regularly with Donna Farmer – what a duo.
Tomorrow we have Closing Statements and then deliberations begin. Hopefully, we will have a final verdict this week!
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