By Kuldip K. Ambastha
On the trading day of Tuesday, November 1, 2022, Johnson & Johnson (JNJ), a major pharmaceutical and medical product provider, announced plans to acquire Abiomed, Inc. (ABMD), a medical device maker. Due to this development, for that day the stock price of Abiomed rose sharply by +49.9% per share, while the stock price of Johnson & Johnson declined by -0.5% per share. Johnson & Johnson will acquire Abiomed for $380 per share in cash, putting an end to Abiomed’s highly volatile tenure as a public company. As Abiomed’s aggregate market value increased over time, investor skepticism around future growth prospects for the company’s offerings also increased. In contrast, Johnson & Johnson by making this acquisition is placing a bet that Abiomed’s medical device products have strong growth prospects which can enhance Johnson & Johnson as a company.
Keywords – Abiomed, Inc., Abiomed, ABMD, Johnson & Johnson, JNJ, pharmaceutical, medical, acquisition, acquire, growth, skepticism.
Disclosure – The principals and clients of Ambastha Financial LLC have no positions in ABMD. The principals of Ambastha Financial LLC have no positions in JNJ, while the clients of Ambastha Financial LLC have long equity positions in JNJ.
Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2022 – Ambastha Financial LLC.
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