Chemours Co (CC) Starts To Rally After Tanking On Wednesday

Chemours Co (CC) Starts To Rally After Tanking On Wednesday

Chemours Co (NYSE:CC) shares staged a partial comeback on Thursday after the reports on Wednesday that it will be on the hook for millions of dollars in damages in connection with a testicular cancer lawsuit. The former DuPont division is a well-known short of Citron Research founder Andrew Left. Last month, his firm called Chemours the “most morally and financially bankruptcy company” ever and “a bankruptcy waiting to happen.”

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Chemours liable for lawsuit against DuPont

Left disclosed in June that he was shorting Chemours, so he benefited financially from Wednesday’s tumble in the company’s share price. Even with today’s rally of more than 10%, the company’s stock has not recovered to where it was before the report about former parent company DuPont losing the lawsuit.

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The case against DuPont involves its Teflon C-8 toxin, which was leaked from a West Virginia plant operated by DuPont and into the Ohio River, a source of drinking water. Chemours reportedly agreed to cover the liabilities associated with the case. Following the discovery of the problem at the West Virginia plant, DuPont spun off Chemours into a separate chemical company.

According to Bloomberg, the jury also ruled that DuPont was negligent and that there was actual malice, which means that it may have to pay punitive damages. CNBC reported that two of its sources said the jury awarded the plaintiff $5.1 million. Chemours reportedly plans to appeal the ruling and may fight back against being saddled with the liability. A lawyer for the company said in a statement to Forbes that DuPont is “the named directly defendant in each of the cases and is directly liable for any judgement.”

However, Goldman Sachs analysts said in their analysis of the case that the company agreed to indemnify DuPont as part of its separation agreement.

Chemours may be on the hook for even more

This week’s case involved a man who said he developed testicular cancer as a result of the leaked toxin. In all there are about 3,500 lawsuits related to the leaked toxin. This is the second of six test or “bellwether” cases that will have a clear impact on what happens to the rest of those lawsuits, according to Forbes. The last case was heard in October when a jury ordered DuPont to pay $1.6 million to a woman who said she developed kidney cancer as a result of the leaked toxin. The jury did not award any punitive penalties in the case, and DuPont is in the process of appealing it.

Chemours said in an 8-K filing that it had already reached agreements with the last two bellwether cases for an amount that was less than the “incremental cost of preparing for trials.

Left argues against an appeal

Andrew Left told the New York Post on Wednesday that the companies should not appeal the decision in the case because it’s more important for them to do “the right thing.”

Last month in his short thesis on Chemours, he accused DuPont of dumping its liabilities in the lawsuits associated with the West Virginia factory into the spin-off. He added that Chemours “was designed to go bankruptcy [sic]” and that the only question on this is when this will happen. Additionally, Left pointed out that while the company’s market capitalization was just 3% that of DuPont, it inherited debt in an amount that was just 20% less than the amount of debt DuPont was left with after the spinoff.

Today’s rally in Chemours stock comes after Dividend Channel said in a post on Forbes that the stock had entered oversold territory after Wednesday’s selloff. The firm uses the Relative Strength Index to determine this, noting that a stock is oversold if the RSI reading declines under 30. In Wednesday’s selloff, the stock’s RSI fell to 29.2.

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Michelle Jones is editor-in-chief for and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at
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