Johnson & Johnson to sell remaining stake in Kenvue

Shares of Kenvue (KVUE) are trading slightly higher on Monday after Johnson & Johnson (JNJ) announced it would sell its remaining 9.5% stake in the company. Kenvue will not receive any money from the sale.

Yahoo Finance Anchors Seana Smith and Jared Blikre break down the latest developments for these companies.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Nicholas Jacobino

Video transcript

Let's talk about Ken View now Marine not as the dramatic of a move, but again, a move that is worth noting here up just about a half of a percent now.

The company on the move after Johnson and Johnson saying that's going to sell its remaining 9.5% stake in the company just a year after Johnson and Johnson spin off.

And Jem, when you take a look at this, move exactly what this means.

Ultimately, here in the longer run, we had the stock.

The stock had been under pressure ahead of the open year, but now it looks like we are trading just slightly to the upside.

Yes, this is a stock.

When it split off from from Excuse Me from Johnson and Johnson, there were high expectations, but it's pretty much sunk since that spin off.

Now, this was an expected move.

J and J was expected to get rid of its remaining shares about 10% of the company, 182.3 million, and this is done through a secondary offering.

It's important to note that this is not that the company itself can view is not going to get any money from the sale.

Now, I do have a market reaction by Bloomberg Intelligence here, and you can see that's today's price action.

Let me just put a max chart so you can see what it's done since that first trade.

Not a lot of green there, uh, from inception.

But I do have this, uh, from Bloomberg Intelligence.

The exit of J, JJ and J is 9.5%.

Can you stake, uh, via a debt for equity stock that enables leverage to be reduced as initially planned?

Removes share overhang.

So this was something that was already planned?

Um, the fact that it has been executed.

Now, just, uh, it's kind of like a potential share overhang that is in the rearview mirror, and we'll have to see what comes of it.

Uh, but here's another thing that, uh, intelligence is noting they're facing second quarter headwinds.

This is Ken View.

They have yet to prove execution fixes can reverse US market share losses.

And so the key to achieving growth growth with Sanofi's consumer health spin off next quarter.

Fourth quarter or later.

That's going to add competition as well.

So just lots of moving parts here in the in the biotech sector