Johnson & Johnson (J&J) has announced its plans to repurchase $5bn worth of shares following a loss of $50bn in market value over two days, dropping $40bn in just one day in its worst trading day in 15 years.
The dramatic decline in share price was due to a Reuters report which claimed that company knew for decades that its baby powder contained cancer-causing asbestos, an allegation J&J stated was "one-sided, false and inflammatory" and "an absurd conspiracy". However, as the report revealed, nearly 12,000 lawsuits have been filed accusing J&J's talcum powder of causing a variety of cancers.
Visit DATA x Singapore on March 5–6, 2019
In a video posted on its website and social media, the company's CEO Alex Gorsky urged customers to disbelieve claims, affirming that J&J stands behind its product and that if the baby powder was not safe J&J would not be stocking shelves with it.
He also said in a statement: "Based on our continued strong performance and, more importantly, the confidence we have in our business going forward, the board of directors and management team believe that the company's shares are an attractive investment opportunity."
Attorney Peter Bicks told Reuters in an email that "the scientific consensus is that the talc used in talc-based body powders does not cause cancer, regardless of what is in that talc.
"This is true even if – and it does not – Johnson & Johnson's cosmetic talc had ever contained minute, undetectable amounts of asbestos."