Monsanto's Stock Is Tanking. Is the Company's Own Excitement About GMOs Backfiring?

[Purveyor]

Pity Monsanto, the genetically modified seed and agrichemical giant. Its share price has plunged 25 percent since the spring. Market prices for corn and soybeans are in the dumps, meaning Monsanto's main customers—farmers who specialize in those crops—have less money to spend on its pricey seeds and flagship herbicide (which recently got named a "probable carcinogen" by the World Health organization, spurring lawsuits).

Monsanto's CEO hinted that the company may be too invested in high-tech seeds, and underinvested in old-fashioned pesticides.
Monsanto's long, noisy attempt to buy up rival pesticide giant Syngenta crumbled into dust last month. And Wednesday, Monsanto reported quarterly revenues and profits that sharply underperformed Wall Street expectations. For good measure, it also sharply lowered its profit projections for the year ahead.

In response to these unhappy trends, the company announced it was slashing 2,600 jobs, 12 percent of its workforce, and spending $3 billion to buy back shares. Share buybacks are a form of financial (as opposed to genetic) engineering—they magically boost a company's earnings-per-share ratio (a metric closely watched by investors) simply by removing shares from the market. And buybacks divert money from things like R&D—or keeping a company's workforce whole—and into the pockets of shareholders.


In a conference call with investors (transcript), Monsanto CEO Hugh Grant put a positive spin on the company's prospects. "Our germplasm performance has never been better, our trait technology has continued to leap and our market position and pipeline remains strong," he declared. But later, he hit upon a theme that became obvious when Monsanto was stalking Syngenta: that Monsanto's leadership feels the company is too invested in high-tech seeds, and underinvested in old-fashioned pesticides. (The market for Syngenta owns the globe's leading position.)

In the call, Jeff Zekauskas, an analyst with JP MorganChase, asked Grant whether Monsanto was still interested in boosting its pesticide portfolio by buying a competitor. Grant's answer was essentially yes: "We still believe in the opportunity of integrated solutions," i.e., selling more pesticides along with seeds. He added:

MORE...

http://www.motherjones.com/tom-philpott/2015/10/monsanto-stock-decline-layoffs

[Xipe Totec]

1. Or, it could be because of their switch in focus to Big Data. nt

With its shares trading at three-year-lows since it abandoned a $46 billion bid to buy Syngenta AG (SYNN.VX) last month, Monsanto Co plans to offer its shareholders a new corporate vision: a future in big data.

Monsanto (MON.N) executives are seeking to reposition the company as a business built on data science and services, as well as its traditional chemicals, seeds and genetic traits operations, Chief Technology Officer Robert T. Fraley told Reuters in an interview.

“We transformed from industrial chemical company to a biotech company, then to a seeds company,” Fraley said. “Now, we’re transforming again.”

Top executives are sketching out plans now, and briefing major shareholders ahead of a wider presentation to investors in November at the company’s St. Louis headquarters, he said.

http://www.reuters.com/article/2015/09/24/us-monsanto-big-data-exclusive-idUSKCN0RO0B020150924

[WDIM]

2. Reaping what they sow.

Their cancer causing poison will be their own end.

[Erich Bloodaxe BSN]

3. They've recently talked about taking a new direction.

http://www.reuters.com/article/2015/09/24/us-monsanto-big-data-exclusive-idUSKCN0RO0B020150924

With its shares trading at three-year-lows since it abandoned a $46 billion bid to buy Syngenta AG (SYNN.VX) last month, Monsanto Co plans to offer its shareholders a new corporate vision: a future in big data.

Monsanto (MON.N) executives are seeking to reposition the company as a business built on data science and services, as well as its traditional chemicals, seeds and genetic traits operations, Chief Technology Officer Robert T. Fraley told Reuters in an interview.

“We transformed from industrial chemical company to a biotech company, then to a seeds company,” Fraley said. “Now, we’re transforming again.”

[NickB79]

4. Their stock is down because of a massive glut of corn and soy on the market

Which has nothing to do directly with GM seed. ALL Big Ag companies, even ones that focus on older, hybrid (ie non-GM) seed, are seeing their stock fall.

This is nothing new; it happens every 5-10 years when the major crop-producing areas of the world all luck out and get good weather. Farming has always had boom and bust years, and since farming has been so taken over by Big Ag corporations, the booms and busts hit their stock prices harder than in decades past.

This year is even harder, simply because the last few years the US Midwest has seen good crop yields, so there is more grain from the year before in stock, driving down prices further.

If anything, it's almost a testimony to their seed and herbicides/pesticides: they performed TOO well and yielded TOO much per acre, flooding markets with excess grains.