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After Hours: Johnson & Johnson Loses Opioid Case, Amazon Allegedly Loses Top Executive

By Eric Volkman - Updated Aug 26, 2019 at 8:51PM

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It hasn't been a winning night for either company, although the scope of their losses is somewhat in question.

Tonight there was some late-breaking news regarding two big stock market mainstays, Johnson & Johnson (JNJ 0.03%) and Amazon.com (AMZN 1.42%). One of them was defeated -- or was it? -- in a major court case, while the other apparently saw a top-level executive depart the company.

There is plenty of action with both stocks in after-market trading. Here are more details about their fresh developments.

A person in judge's robes banging a gavel.

Image source: Getty Images.

Johnson & Johnson socked with $572 million fine in opioid case

There aren't many companies that can lose a court case to the tune of $572 million, then have bulls rush into their stock.

But that's the case tonight with Johnson & Johnson. It was reported after hours that the healthcare giant had been defeated in a lawsuit over opioid addiction, and ordered to pay $572 million in penalties.

In the closely watched, high-profile case, Johnson & Johnson was accused of contributing to an addiction crisis plaguing the state of Oklahoma -- both directly through its products and via two portfolio companies that supply other opioid product makers. During the proceedings, the company argued that its marketing and sales activities with such goods were lawful, and it was not at fault for the crisis.

In a press release on the outcome, Johnson & Johnson said it would appeal the "flawed" ruling. In its opinion, "[t]he State failed to present evidence that the Company's products or actions caused a public nuisance in Oklahoma."

The company added, "The State's claims violate fundamental principles of due process by seeking to hold a company liable for conduct permitted under federal law and regulations."

Oklahoma Attorney General Mike Hunter has a different view. In a statement released during the trial, Hunter said, "The company perpetuated the epidemic through the targeting of high prescribing doctors, repeatedly ignoring warnings to clean up its act by the federal government and its own scientific advisors and the myriad of other deceitful practices on its way to selling more highly addictive drugs to a vulnerable population."

Yet many pundits and analysts expected Johnson & Johnson to lose the case. In fact, they were anticipating a much higher penalty of roughly $1 billion. On top of that, the state had asked for as much as $17 billion.

Since the amount mandated is far lower, and the company is shooting for an appeal, investors are cautiously bullish on Johnson & Johnson stock tonight. It's up by 2% in after-market trading.

Report: Amazon's global treasurer steps down

In a case of inauspicious timing, one of Amazon's key finance executives has apparently left the company. In an article published after market close today, CNBC.com reported that Global Treasurer Kurt Zumwalt is no longer employed at the massive online retailer.

Citing "people familiar with the matter," the article states that Zumwalt stepped down last week. He has since amended his LinkedIn profile to indicate an August 2019 departure. The company has not officially announced the transition, nor has it responded to the CNBC report.

Zumwalt was a 15-year veteran of the company. His numerous responsibilities included portfolio management, debt financing, and foreign exchange, among others.

Although his exit isn't necessarily a worry in itself, it comes shortly after several other high-level departures. Additionally, it's in front of the full rollout of the company's one-day delivery service. The costs for this initiative are considerable, to the point where they have already impacted Amazon's fundamental performance.

CNBC was unable to ascertain what job, if any, Zumwalt was departing to. It also did not speculate about his potential replacement.

There is a lot of information tonight concerning Amazon's business, so perhaps this executive exit isn't getting a lot of notice or concern from investors. Amazon stock is trading flat at the moment.

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Stocks Mentioned

Amazon.com, Inc. Stock Quote
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$176.99 (0.03%) $0.05

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