Bayer, the maker of Aspirin, in focus after steep drop in stock price
At the start of this trading week, it was likely that many aspirin tablets were needed in Leverkusen, and even Bayer shareholders need at least calming pills. The share price of Bayer plummeted on Monday by around 20%, as you can see in the chart of the already weakened stock:
A 20% discount is not seen every day with a DAX-listed company. The triggers are known: the stock plummeted after a further billion-dollar judgment was reported in the dispute over the herbicide glyphosate and the Phase III study of the company’s biggest hope was also announced. So, a US jury court has sentenced the pharmaceutical and agrochemical company to a payment of more than $1.5 billion in a glyphosate process.
That was simply too much for the German manufacturer of Bepanthen, Aspirin or Iberogast. Bayer had won nine out of the last 13 court cases and settled the majority of the lawsuits.
Cut the rope or stay? You may now be wondering how you should behave with regard to your Bayer investment. Cut the rope or stay on the ball? Or are these now even bargain prices for the stock? Questions upon questions …
Analytically speaking, Bayer was already too cheap before the sudden price crash at the beginning of the week.
However, the fact is on the other hand – and this must be said clearly: the drought period for the stock could still be extended. After all, not only is the wave of lawsuits in the US apparently more and more turning into an endless loop, but there is currently also a lack of potential blockbusters within the pharmaceutical industry.
On the other hand, this can change quickly and Bayer has set aside more than 6 billion euros in terms of glyphosate. This should definitely be enough, especially since the latest lawsuit will never stand in this dimension. According to Bayer’s own statements, the company will use all available legal remedies.
My conclusion for you Bayer remains a turnaround speculation for you. However, it should be said that only brave, speculative and long-term investors should take advantage of the current level or possibly reduce their existing positions.
I have no doubt that this bet on the comeback will pay off in the long run. The price crash is exaggerated. Patience is the keyword. In addition to the recent negative reports that have scared investors, there have also recently been numerous glimmers of hope.