Wall Street Breakfast Podcast: Bayer Hit With $332M Verdict

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Bayer (OTCPK:BAYRY) slapped with $332M jury verdict in Roundup cancer trial. (00:29) Real estate stocks slump amid report NAR, brokerages guilty of collusion. (01:32) WeWork (WE) poised to file for Chapter 11 bankruptcy next week – report. (02:38)

This is an abridged transcript of the podcast.

Bayer’s (OTCPK:BAYRY) (OTCPK:BAYZF) Monsanto unit was ordered by a California jury to pay $332M to a plaintiff who blamed his cancer on his use of the company’s Roundup weedkiller.

Bloomberg reported Tuesday, that the jury awarded Michael Dennis $7M in actual damages and $325M in punitive damages over his claims that 35 years of using Roundup on his lawns and gardens caused his non-Hodgkin’s lymphoma.

It was Bayer’s (OTCPK:BAYRY) (OTCPK:BAYZF) third trial loss in a month after winning nine Roundup cases in a row.

Last week, the company was ordered by a Philadelphia jury to pay a retired pizza shop owner $175M in damages over his cancer, and a St. Louis jury awarded $1.25M to another man who blamed his cancer on Roundup.

Morgan Stanley analysts said that the recent verdicts may signal Bayer (OTCPK:BAYRY) (OTCPK:BAYZF) will be forced to tap most or all of the $16B it has reserved to deal with Roundup litigation costs.

The National Association of Realtors, HomeServices of America and Keller Williams were all found guilty of conspiring to inflate commission rates.

The verdict was reached by a jury in Kansas City, Missouri.

Zillow (NASDAQ:ZG) (NASDAQ:Z) retreated nearly 7%, Redfin (NASDAQ:RDFN) slid 5.7%, eXp World Holdings (NASDAQ:EXPI) -8.7%, Compass (NYSE:COMP) -6.2% and Opendoor Technologies (NASDAQ:OPEN) -9.1%.

HousingWire reported that the three defendants have been ordered to pay $1.78B in damages.

The plaintiffs argued during testimony that the trade group and corporate brokerages knowingly breached their own rules in an effort to keep commission rates high.

The report said the class action antitrust suit was originally filed in 2019. The judge still needs to issue his final judgment on the case before the verdict is finalized.

The suit was said to have included Re/Max Holdings (RMAX) and Anywhere Real Estate (NYSE:HOUS) as defendants, though both companies had already reached settlements.

WeWork (NYSE:WE) is planning to file for Chapter 11 bankruptcy as soon as next week.

The Wall Street Journal reported on Tuesday, citing people familiar with the matter that the company is considering filing a Chapter 11 petition in New Jersey.

Premarket WeWork is down 39%.

Last month, WeWork (WE) missed two sets of interest payments totaling ~$95M. It received a 30-day grace period before the non-payment becomes a default event. On Tuesday, it reached an agreement with bondholders for seven more days to negotiate with stakeholders before it’s declared in default.

In September, WeWork (WE) said it was seeking to renegotiate leases on almost all of its locations. That came within days of a report that the company hired advisers for restructuring advice. About a month before that, it disclosed that there’s “substantial doubt” about its ability to continue as a going concern.

In 2019, the company was valued at as much as $47B. Its market cap now stands at ~$185M.

Other articles to look out for on Seeking Alpha:

CRISPR, Vertex gene editing therapy gets warm response from FDA panel

Generative AI in ‘very early days’ for software giants like Microsoft, Salesforce – Deutsche Bank

U.S. automakers oppose Cleveland-Cliffs bid for U.S. Steel – report

Tesla eyes producing 200,000 Cybertrucks annually – Elon Musk

On our catalyst watch for the day,

• Notable investor events include the 38th Annual Meeting of the Society for Immunotherapy of Cancer.

• Chinese electric vehicle makers Nio (NIO), XPeng (XPEV), and Li Auto (LI) will be on watch with October deliveries due to be reported. The EV reports from China are being closely monitored amid a pricing battle in the sector.

• New Relic (NEWR) shareholder vote on $6.5B sale to Francisco Partners.

U.S. stocks on Tuesday ended in the green, with all eyes turning to the Federal Reserve’s rate decision later today.

The S&P 500 rose 0.65%, The Dow (DJI) added 0.38%, while the Nasdaq (COMP.IND) climbed 0.48%.

All 11 sectors ended in positive territory, led by Real Estate and Communication Services.

However, the S&P 500 (SP500), slumped to its third straight month of losses. The last time that happened was in the first quarter of 2020. And for the first time since 2016, the average has fallen in each of August, September and October.

For the month, the S&P slid 2.20%, the Dow (DJI) was down 1.36% and the Nasdaq (COMP.IND) was down 2.78%.

Treasury yields steadily rose on Tuesday. The 10-year yield (US10Y) rose 3 basis points 4.91%. The 2-year yield (US2Y) was up 3 basis points to 5.07%.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the red. The Dow is down 0.4%, the S&P 500 is down 0.5% and the Nasdaq is down 0.5%. Crude oil is up 1.4%.

In the world markets, the FTSE 100 is down 0.1% and the DAX is down 0.1%.

The biggest movers for the day premarket: Paycom Software (NYSE:PAYC) is down 37% following mixed Q3 results and a disappointing Q4 outlook. And Yum China (NYSE:YUMC) slipped more than 12% following lower-than-expected Q3 results.

On today’s economic calendar

• 8am the treasury refunding announcement

• 2pm the FOMC announcement

• 2:30pm Chairman press conference

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.