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Bayer Stock Keeps Falling as Its Monsanto Woes Stack Up

August 16, 2018, 11:23 AM UTC

Bayer stock continues to slide in the wake of last week’s bombshell verdict on the carcinogenic nature of Monsanto’s Roundup weedkiller.

Bayer bought Monsanto earlier this year for $63 billion. Roundup’s active ingredient is a herbicide called glyphosate, which a jury last week decided was responsible for the cancer of former groundskeeper Dewayne Johnson—a verdict that quickly lopped 10% off Bayer’s share price.

Glyphosate’s responsibility for causing cancer is a deeply contentious issue. The World Health Organization thinks the substance is dangerous. However, the European Union decided in 2015 that it is not carcinogenic, the Environmental Protection Agency said last year that it probably doesn’t cause cancer, and Bayer continues to argue that its newly acquired product is safe—it’s appealing the Johnson ruling.

But on Wednesday, the California Supreme Court turned down Bayer’s attempt to keep Roundup’s name off a list of known carcinogenic chemicals.

Bayer’s share price fell 6.1% on Thursday, following the Californian decision. So far, it has lost more than 18% of its value since the Johnson verdict, and is now lower than it has been for more than five years.

The negative sentiment can also be traced to class action lawsuits that the company is facing in the U.S. over its Dicamba herbicide. According to Bloomberg, Arkansas and South Dakota farmers who are suing Bayer/Monsanto say Dicamba harmed crops adjacent to those on which it was sprayed—it’s only supposed to be applied to plants that are engineered for resistance to Dicamba.

Meanwhile, according to Germany’s Wirtschaftswoche magazine, glyphosate could also face a ban in Brazil. And environmentalists said Wednesday that they found unhealthy levels of glyphosate in popular breakfast cereals such as Cheerios.

“The perception is that a huge wave of lawsuits and penalty payments are rolling toward Bayer,” Baader Bank analyst Markus Mayer told Bloomberg.