Monsanto’s Stock Price is Falling
Monsanto’s taking hard hits lately. If it’s not their glyphosate being deemed “most likely carcinogenic” it’s the American Academy of Pediatrics cutting ties with them. And in October, Monsanto’s stock price took a hit as well.
Wednesday, Monsanto reported quarterly revenues and profits that sharply underperformed Wall Street expectations. For good measure, it also sharply lowered its profit projections for the year ahead. Its share price has plunged 25 percent since the spring.
What does this mean for the company? It’s too soon to say, but immediate measures are being taken to keep its stock price healthy.
In response to these unhappy trends, the company announced it was slashing 2,600 jobs, 12 percent of its workforce, and spending $3 billion to buy back shares. Share buybacks are a form of financial (as opposed to genetic) engineering—they magically boost a company’s earnings-per-share ratio (a metric closely watched by investors) simply by removing shares from the market. And buybacks divert money from things like R&D—or keeping a company’s workforce whole—and into the pockets of shareholders.
According to the article, Monsanto sees hope of reviving itself through the sale of more pesticides.
To read the article, written by Tom Philpott, in its entirety, click here: