Why Johnson & Johnson Stock Sank Today
Shares of Johnson & Johnson (NYSE: JNJ) were sinking by 5.9% as of 3:31 p.m. EDT on Friday after the healthcare giant announced a recall of a single lot of its Johnson's Baby Powder. J&J stated in a press release that the recall was initiated "out of an abundance of caution" based on the results of a U.S. Food and Drug Administration (FDA) test that found "sub-trace levels" (no more than 0.00002%) of asbestos contamination in a bottle of its baby powder.
The recall of one lot of a product might not seem like a big enough issue to cause one of the largest companies in the world to lose over $20 billion in market cap. However, the news spooked investors because it highlighted the risk for Johnson & Johnson as it faces multiple lawsuits related to alleged asbestos contamination of its baby powder products.
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Source Fool.com
