James Cramer with a view from TheStreet.com – Merck Will Be Tort Bar’s Next Target:
Is Merck going to be a trust for those who took Vioxx? That’s what you are betting if you sell this stock down $12. You are betting that the tort bar, which has almost finished destroying tobacco and asbestos, just found its newest target.Frankly, I think that’s a decent bet. I fear the tort bar has become the single biggest destroyer of capitalism and shareholder value in the world. It is virtually unstoppable. And when the juries hear that people died because they took a drug meant to relieve shoulder pain, they will destroy Merck, sure as shinola.
That I could write these words instead of urging you to buy Merck is a testament to the acknowledgement of the tort bar’s power. It is unchecked and will be unchecked no matter who is elected president. Because the incentives to be a tort lawyer, to take the cases, to bankrupt Merck, are too great and the barriers to doing so are way too low.
Is it an overreaction? Short-term, I am sure it is. Long-term? Nah. This was a widely prescribed drug. So, $27 billion in losses between lost sales and jury verdicts?
Reasonable.
Update:
Forbes gives another view.
