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Chemours Shares Extremely Volatile After Du Pont Ordered To Pay $10.5 Million In Damages

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Chemours Shares Extremely Volatile After Du Pont Ordered To Pay $10.5 Million In Damages
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Chemours Co (NYSE: CC) shares were volatile Thursday morning after a U.S. jury charged E I Du Pont De Nemours And Co (NYSE: DD) $10.5 million in punitive damages for a suit regarding chemical leaks.

Du Pont spun off Chemours in July 2015, at which point it transferred all legal liability to the new corporation.

When Bloomberg first broke news of the charges, shares of Chemours fell to $20.82 before immediately bouncing to $22.60. As time of writing, shares were trading at $21.80.

Volatility And Investor Confusion

The volatility demonstrates confusion by traders over what the charges for Du Pont mean for Chemours. The recent lawsuit is Du Pont’s third related to perfluorooctanoic acid leaks in Ohio, and the company faces 3,440 charges over a leak in a West Virginia plant.

Some are using the ruling Thursday as a precedent for a portion of the remainder of the 3,440 cases and extrapolating a potential value for the damages Chemours may need to pay; however, this is strictly speculation.

Short Covered

Citron Research's Andrew Left told Benzinga on Thursday that he has covered part, but not all, of his short position in Chemours. The activist short-seller firm published a report in June noting that Chemours is “purposely designed for bankruptcy” and “this stock is a zero.”

Price Action, Quiet Period

Traders should also pay attention to Wednesday’s price action in Chemours, during which shares rose 8 percent on news that the company was added to the S&P MidCap 400 Index.

Chemours was unavailable for comment because it is observing a quiet period until it reports fourth-quarter earnings February 21.

News of the volatility was initially reported on the Benzinga Pro platform.

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Posted-In: Andrew Left Citron ResearchNews Short Sellers Legal Markets Interview Best of Benzinga

 

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