Here's Why Mallinckrodt Is Collapsing Today
Shares of Mallinckrodt (NYSE: MNK) dropped as much as 45% today after Bloomberg reported that the company is considering restructuring, and possibly bankruptcy, as a strategy to limit its legal and financial exposure related to the opioid crisis. The company is facing lawsuits claiming it and other opioid manufacturers downplayed the addictive nature of such drugs and didn't do enough to stop suspicious orders, thereby playing a central role in the complicated origins of the ongoing crisis.
While some analysts estimate the legal settlements and fines could reach into the billions of dollars, settlements to date have been much lower. That said, Mallinckrodt's balance sheet suggests even smaller fines and penalties could prove to be an existential threat.
As of 11:47 a.m. EDT, the stock had settled to a 39.4% loss.
Source Fool.com
