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Why The Biggest Pharma Company In The U.S. Is Breaking Up
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- čas přidán 16. 08. 2024
- Johnson & Johnson, the biggest pharmaceutical company in the U.S. based on its market cap, announced in November 2021 it plans to spin off its consumer business into a new publicly-traded company by November 2023. Analysts overwhelmingly say it’s a smart business move, but it could also come with some risks. Watch the video above to learn why Johnson & Johnson is splitting itself up and how investors are reacting.
Johnson & Johnson announced in November that it plans to spin off its consumer business into a new publicly traded company by November 2023.
The news didn’t surprise Wall Street.
“The analyst community has been talking about splitting up J&J for years,” said Jared Holz, health-care equity strategist at Oppenheimer. “The timing situation is critical, just because people have been very curious or intrigued as to why now.”
Johnson & Johnson is the biggest pharmaceutical company in the United States based on market cap. It was ranked 36th on the 2021 Fortune 500 List of the largest U.S. corporations based on total revenue. The company has experienced dividend growth for nearly 60 years and has consistently outperformed the S&P 500 for the past 25 years.
“What the market is saying is that companies should focus on their core competencies and let us diversify,” said Louise Chen, managing director at Cantor Fitzgerald. “We’ve already seen several examples of large pharma separating out noncore assets.”
So far, investors’ reaction to the spinoff has been mild, with the stock moving only modestly higher on the news in November.
“There are some risks to this execution from separating out the consumer business,” Chen said. “I think investors aren’t fully convinced yet of the standalone earnings potential of both companies.”
There are other potential headwinds to the split. The company has been dealing with numerous legal challenges over the past several years, many of which are ongoing and could result in as-yet-unknown fines and settlements.
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Why The Biggest Pharma Company In The U.S. Is Breaking Up
When I heard that Johnson & Johnson is splitting into two separate companies, I assumed they’d be called Johnson and Johnson.
Who wouldn't?
Mr Johnson and Ms Johnson
It’s like left Twix an right Twix
"Hi, I'm a conglomerate; this is my wholly-owned subsidiary Johnson and my other wholly-owned subsidiary Johnson." (#attemptednewhartreference)
Johnson, the pharmaceutical company with a red logo on a white background, is not to be confused with Johnson, the pharmaceutical company with a white logo on a red background.
If you split the company into sections, it divides their liabilities in case a person sues the company.
🤯🤯👁️👁️👁️
yep. preparing for a shitstorm in regards to their vaccine. They want to make as small of a portion of that company take a hit as possible.
If u are going to go on that subject ; splitting the company gives more write ups for Taxes too ! Now, u can claim or state ur losing money on ur other companies !
@@jamesblume9567 Still taxes is same
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2. Points: Putting the liabilities for a product of an ongoing law suite in an offspring company and beeing able to file that bancrupcy independently from the mother company is one giant ass move and that this is even possible is just a deep indication how unjust the US judicial system is. Individual People are put behnd bars for minor reasons, but selling cancer stuff to babies....oh yeah i cut of a piece of hair from myself and burn it, no reason to worry.
Second: First few minutes: It creates alot os shareholder value.....the rest of the video is analyist bullsh***.
😂😂😂 I second that. The analysts seems to talk with lots of things thrown in. Even in argumentative composition. The in conclusion you have to pick a side.
J&J keeps the lawsuits at J&J. They don't roll over to kenvue
Wow that comes in handy! When you are threatened by lawsuits just spin of your valuable assets to protect them from any claims. Could you imagine if regular citizens were allowed to act like those at the top?
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You can, just gotta learn the loop holes
@@daebak7370 wtf
@@Stoneface_ We can't even tell if he's joking or not at this point.
@@daebak7370 you are a misinformation extraterrestrial. Misinfo ETs are the biggest threat to human civilization at this time. You should be ashamed
Company A takes all the liability.
Company B takes all the assets.
Company A files for BK.
100%
0 taxes paid then federal gov bailout J&J perfect pony scam like the big banks, hedge funds
Company B protects its investors & board of execs.
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Because they want to avoid full possible repercussion from lawsuits due to their baby powder fiasco with long term health effects
Absolutely this
I can't believe Johnson and Johnson are breaking up, thought they'd be together forever.
They were a great couple... at first O_o
But then Johnson starting "doing drugs"
Bad drugs!
Drugs that got people killed.
Now the other Johnson wants to distance itself from that so when Johnson goes down for it's ill fated drug dealing, the other Johnson can keep on going.
reality.
LOL, seriously I kept waiting for someone to say they are going to split the company and one would be called Johnson and the other would be called Johnson.
So then they'll be split in two companies, Johnson and Johnson.
It was founded by 3 Johnson’s initially, maybe one get to keep 2 ;)
Because of money.
Merck did it last year btw. It's a new trend.
Splitting products lines with different profitability to give them each the attention they need.
Shareholders keep shares of both companies. Employees are not fired like they may have been by selling divisions to competitors. It's a win win situation.
or those juicy tax loopholes...instead of a bus its now a double deck flex bus.
I don’t like the way they calling my medicinal products a “consumer” business.
@@TheBooban that’s just to differentiate things you can buy OTC (listerine, bandaids,…) from the pharma division, which is prescription based medicines in general.
Medical Examininer case
They are trying to separate out the lawsuits into a single company that they can bankrupt to not pay out victims? It should be effective
They won’t go bankrupt though. And you can’t do that either.
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Let's be honest. It's so they can file for bankruptcy after the baby powder lawsuits, while keeping the rest of the company solid.
Biggist questions when splitting how dose the stocks get seperated dose that mean thay can shift large stockholders to one side and smaller individuals to others letteing the ligabilaty fall on the pepole them selfs insted of the big stack holders how decides with stock gose on witch side
@@johnehett2499 Current shareholders will get shares from the new company.
@@Stoneface_ to my understanding it is brakeing 8n to two separate companies my qestiin is how the shares in one company becomeing two split and how decides how its split its not just becoming one new company ita become to spliting its assets and branches so how dose the stock get split
When reps from the company say we're doing x but not because of y and z, it is exactly because of y and z
Same company said the baby powder was perfectly safe. At a certain point if someone proves they are a liar belive them.
Basically because of Lawsuits.
That’s basic business 101
not at all. big companies that often impact multiple industries spin-off as a way to concentrate management and hopefully profit off of them more in the long run.
not sure where you learn about conducting business spinoffs to avoid/soften lawsuits in business 101.
New company names - Johnson 1 and Johnson 2
They were actually going with small and large Johnson. One is a grower and the other a shower, they hope
Lifetime
Insurance
To limit financial liability as a result of all the lawsuits they're losing.
Such as?
Yeah… find me a lawsuit their losing
@@MahiAviation Did you not watch the video? They mentioned tons of them in the video!
Internet
@region bank Barataria
Congrats on winning the lawsuit. Unfortunately the original conglomerate is no longer a thing and the resulting new companies are separate legal entities.
Facebook
Merk split off a company last year. It happens a lot. JNJ investors will do well with this split.
@Hello George how are you doing?
I wonder if I can spin-off my liabilities while keeping my assets. I wish I had the rights of a corporation.
When you have enough assets then you'll know
Yeah and I wish I could fly like a bird
Why dont you.....there is no law that says you cant play by the same rules.
Our names in capital letters on everything and our birth certificates make us a legal corporation owned by the Vatican. Look into it as I only know a little about this topic but santos bonnaci talks all about it to Eddie bravo ect on CZcams.
@@knowledgeispower131 lmfao. You're a "genius".
They been doing this business practice in the taxi industry for years, all it is if one has a liability the others don't share that liability, it's a legal loop hole to make the rich stay rich.
Until COVID 19 I didn't even know they was a farmaceutical Company and I was like "whaaaaat? They can't even produce a decent shampoo! How am i supposed to trust them on medication?"
Maybe thats exactly why you CAN trust them?
Shampoo FDA
Hospital shampoo
Working fine
Shouldn’t the lawsuit freeze this type of behavior?
Not when you pay off the regulators
@region bank Barataria deshanDouglas lawsuit Johnson &johnson
Medical
Account
Lawsuit
Everyone gets a Johnson, you get a Johnson, you get a Johnson!
So to basically divide their liabilities from all those lawsuits, to cut the losses and move on. Yeah sounds like capitalism.
why? so you get confused who to sue for a bad product
Disgusting. How is it even legal for them to create this "liability shell" fake company to avoid going out of business or paying massive fines?
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Can't have their good name tainted by cancer baby powder...
Now time to break up CensorTube and google
You're literally on CZcams, they making $ off of you right now
@@tylerjay. I use DuckDuckGo and Rumble as much as possible. But that’s irrelevant. I don’t want to shut down CensorTube. I want it to be broken up and not be a massive monopoly, and have laws that prevent censorship by monopolies.
I would've liked to also know if the split has other implications than financial ones for example does it have a chance to affect their customers in a negative way
Of course !! The scam is what the game really is !!!
@@jamesblume9567 what is the affect on customers?
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@@daebak7370 are you high right now?
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JnJ has lots of legal action pending...what have they done with that part of their company? And will declaring bankrupsy of this company be the play to offset this problem ???..ALSO...where do JnJ manufacture their products??
The market is saying health care is too expensive and "investment" in health care is not helping.
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DeshanADouglas
Region bank Barataria @deshandouglas5@
It just makes a lot of sense, as it allows the company to execute things in a focused way. Because the business each of these businesses have very different needs for staffing and strategy.
That is so true. BTW just checked you channel you are so underrate dude subbed keep the good work going.
I too, watched the video.
@@neon200 which video did you watch?
Probably to avoid a lawsuit.
Yes, this!!
Surely it can’t be legal to have two companies both named Johnson
Med tech and pharma need to be together. Investors suggesting they should be separate shows a clear lack of knowledge about the two.
Limiting the potential liabilities.
yes
Why? Money. Simply money. The individual parts are worth far more than the sum of the parts. VW Group is doing the same by spinning off Porsche. There be big money out there and legacy corporations don't have the sizzle that new start ups do
@Hello John how are you doing?
I don't understand business. Do I understand correctly that this company created a shell company to absorb the lawsuit and die with it? Is that what will happen or is happening?
I wonder if they were willing to split of courts were able to get money from both companies before split.
Also about talc, it had asbestos in it, since many talc rocks have trace amounts of it, hard to detect but just as deadly when used.
Absolutely this
Mesothelioma glucose gastric
Great to hear Johnson & Johnson breaking up into Johnson and Johnson.
Thanks for the support
Team support
Gee, it's almost like turning every company into one giant monopoly is a _bad_ thing, who knew?
Its still a monopoly if thay dont compete aginst each other and retain ther alliances
I'm not surprised how this "report" dedicated only One Small line to J&J's involvement in the Opioid crisis that helped make them profit.
Hope this doesn’t negatively affect anyone, ex. consumers.
I kinda thought they would spilt when they released the worst vaccine available😂
Their new name - Johnson and the other Johnson
I thought johnson was fighting johnson and then they would be johnson and johnson lol
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"Big Johnson and Little Johnson" - Die Hard 1987
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Why does the video have Interstellar music in background?
Logan Roy does not approve of this split.
The company is breaking up, so the people suing can not receive a settlement!! Even a layman person can see this!🤨🤔
The split will create 2 IPO co so they can take more public money at a large scale globally.
No brainer. Gotta protect that sweet pharma n medical device money 💰 from d darn talc powder litigation yo!
I'm from India
The J&J company open a branch in Mumbai
Many people invest in the company like 17500 Indian Rupee
You Americans know it ??
Please answer me.
I'm a poor man invest their company.
Is it fraud???
Dang, that's some obvious Enron mumbo jumbo on the talc liabilities.
Don’t worry they will merge again and split again and merge again in one form or another just like the telecommunication companies.
So Johnson & Johnson will be Johnson and Johnson? Sounds legit.
Can I spin off all my debts into a separate company which will then declare bankruptcy
As if…wish “we the ppl.”could do dat.
Was this video narrated by Elizabeth Holmes? 😬😳
Johnson and Johnson brakes up into Johnson and Johnson.
Not watching. Just going to imagine a “Cain and Abel” scenario between the Johnson brothers and presume it’s that
LIABILITY MOVE
The execs at Johnson and Johnson and all the analysts in this video just keep saying. Yeah j and j has all these problems but they're not going to affect the stock and everything's fine don't worry. It's like they're in denial or like they don't want to admit that j and j is a ticking time bomb with serious issues that just keep compounding
Christian Standard Bible
And if we know that he hears whatever we ask, we know that we have what we have asked of him. 1John 5:15
Amen
Amen
I know of people who generalize this talcum powder information to all brands of talcum powder.
Ninja,
J&J make the spin offs too. Its the same ingredients only that they're 3+ years old when bottled.
Well, it’s definitely not the Stacklers - they already escaped…
so basically it's called Johnson 1 and Johnson 2?
Because of the lawsuits over the powder
Wow, Factual and transparent! It's to the point !
Transparent
So it's just gonna be Johnson?
All hell breaks in judiciary
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Is it just Johnson now?
Who else had stroke-like symptoms with the J&J vaccine ?? 🙋♂🙋♀
I’m getting dumber
I have taken 2 vaccine doses im still alive but ive taken another vaccine not j&j
There in over their head. They pay role is gigantic.
@Hello Toolmaker how are you doing?
Split into Johnson1 and Johnson2
I See this as a positive move.
They are breaking up into two companies: Johnson and Johnson.
Interesting how there is no Tesla on your list of top american companys but there is Ford Motors...
I never knew Johnson Johnson was a pharmacy company
They're protecting assets
Don’t have the biggest Johnson in town anymore
For shareholders*
J&J declined to comment on both issues?
GUILTY GUILTY GUILTY
*slams invisible gavel*
this is like the most normal thing in any business
Biggist questions when splitting how dose the stocks get seperated dose that mean thay can shift large stockholders to one side and smaller individuals to others letteing the ligabilaty fall on the pepole them selfs insted of the big stack holders how decides with stock gose on witch side i am shur thers no laws that increase this cant be done to shift financial liability to sell investor's thisshould be illegal and should not be abile to be done
How is it legal to create some shell company with the intention to go bankrupt and shed all those legal liabilities?
Because they can buy off the regulators.
After Ashwathy Achu, it is now Aparna Mulberry
Maybe the people "up there" in JnJ feel they've become TOO BIG to maneuver the market, which should insure longevity (ask how P&G, Unilever and Nestlé have been there for so long), but thinking their OTC products division is the laggard, think again...
Pfizer sold years ago their OTC brands (most from Warner-Lambert, including Listerine) to JnJ t year later buy another bunch of OTC brands, including Advil. OTC, even with the generic competition is a MORE STABLE form of revenue and profits than Rx products (the biggest reason why Pfizer got back into OTC).
Problem with Rx products and procedures is the FINANCIAL RISK is huge and have to constantly develop new medicines and procedures to keep making profits.
A balance of Rx, OTC and other products makes more sense... (they still will have to keep selling brands every once in a while to keep FINANCIALLY VIABLE)
Johnson & Johnson breaks up into Johnson and Johnson
Wonder what Jamie Johnson is up to these days... He did some decent documentary films back in the day.
All those mentioned point are useless, what they want to do is split up as much as it can so the lawsuit from baby powder wont affect much in sanctions. Just a normal big company move when the face something that cant solve so they split up to reduce it lost.
As a business man perspective.
I buy their Aveeno skin care products lotions the oatmeal one and the unscented and daily face scrub. It helps my skin.
I wanna see it break up.
If J&J didn't have Splenda as the number 1 revenue source, the legal issues would have sunk the company. Awful company.
This most be a joke.
@@Swagalious689 Sadly it isn't.
1 part cancer powder and 1 part heart attack.
Fair hearing
Johnson & Johnson to J&J.
So we can’t burn them down all at the same time, obviously .
Louise didn't account for her webcam height and so it looks like she's looking elsewhere throughout the interview, at least until towards the end of the interview
New Jersey produces liability