> That's hyperbole. Even if they were fined their market cap, the company would survive.
Really?
Market capitalization is, loosely, asset valuation plus X years of projected future earnings.
If JNJ was fined their market cap of $451B, it would take about 19.6 years of earnings to pay, assuming no declines due to reputational damage from the judgement. (2021 earnings $23B, BTW up almost 40% from 2020!).
So call it 20 years, with 100% of earnings dedicated to payment of the fine.
They could sell off assets (recent valuation $179B), but a) that would diminish their earning potential over the period, and b) even if they sold literally every owned asset (reducing the company to nothing), it would only reduce the fine restitution period from 20 years to 12 years. And since they'd be reduced to zero revenue and earnings, it would take infinitely many years to pay off the remainder. Of course the company will have ceased to exist at that point, satisfying GP's prediction of non-survival.
> > That's hyperbole. Even if they were fined their market cap, the company would survive.
> Really?
Yes. Even in this unlikely scenario, the company would easily continue on. The idea that this case could put them out of business is ridiculous and I stand by it.
> it would take about 19.6 years of earnings to pay,
You're thinking about it the wrong way...like most people who think that you can stick it to megacorporations. Think about how it pays out over the next 100 years? Because that's much more likely and efficient. While you might think it depends on the terms, it's going to be financed so there's not much to be done to liquidate them. Then think about how many decades before it can lobby (cough legislate) some additional financial tools?
> Market capitalization is, loosely, asset valuation plus X years of projected future earnings.
Irrelevant, at best. Large companies that should fold according to this kind of rough thinking don't fold on a consistent basis. Consider that you're oversimplified weasel calculation doesn't mean what you think it does.
Not sure where your hostility comes from. I'm not trying to stick anything to anyone, I just don't agree with your financial analysis.
The DOJ does not do 100 year payment plans. No idea where you got that idea. You think Deutsche Bank (or its moral equivalent) is going to line up for that loan? I don't see it.
In the "fined-full-market-cap" scenario (which I consider highly unlikely, and have zero opinion on desirability), I'd expect JNJ to declare bankruptcy (which would not discharge the fine) and be sold for parts.
Maybe I'm not thinking creatively enough, but I intend no weaseling, and there's no need to be a jerk about it.
That's hyperbole. Even if they were fined their market cap, the company would survive.