Breathe easy
Defect headaches at Phillips
Good morning, analytical minds. This is your Stock Market Rundown for April 15th, 2024. Thanks for joining me for another week of financial fun stuff. Let’s dig in:
TODAY’S TOP STORY: RECALL NOTICE
While the US is famous for being overly litigious, the lawsuits have an upside: corporations have to be extra-careful that their products don’t hurt anybody. Because, if they do, punishment can get extremely expensive.
Philips, a multi-billion-dollar medical device manufacturer, recently learned this lesson when they were forced into the biggest medical device recall in history.
The problem was with their devices for obstructive sleep apnea, better known as CPAP machines. (One bestselling model was named the Dreamstation, which sounds more like the latest gaming console than a medical device.)
The machines deliver steady air pressure to help patients breathe while they sleep. Problem is, Philips’ machines had a foam that could degrade and release toxic fumes. The thought of breathing in carcinogens while getting your shut-eye is enough to give anybody nightmares.
Worse yet, Philips withheld thousands of complaints about the foam for more than a decade. Now, Philips has reached an agreement with the FDA that bars the company from selling CPAP machines in the US. And that’s after being forced to shell out half a billion bucks in a class-action settlement, a plummeting stock price, and thousands of layoffs.
So, do they admit they screwed up? Of course not: Philips maintains that the devices caused no “appreciable harm” to its customers. So much for sweet dreams.
SO WHAT ELSE IS GOING ON?
Boeing has been in the headlines for a series of safety snafus, and you might think top execs would get their pay docked. But you’d think wrong: the CEO of Boeing got a big raise instead. Talk about failing up.
Elon Musk predicts that, within a year, AI will be smarter than the smartest human. Soon a chatbot will be able to simultaneously do your taxes and beat you at chess.
An Apple store isn’t exactly the salt mines, but employees at an Apple store in New Jersey have filed to unionize. Maybe they’re tired of customers logging into Tinder on the display devices.
US lawmakers might give TikTok’s Chinese parent company, Bytedance, a one-year deadline to divest ownership of the app. Is that enough time for me to watch all the TikToks of gym bros demonstrating proper squat form, and cats falling into bathtubs?
That’s it for today, my friends; catch you back here at the usual time tomorrow morning. Yours in capitalism, The Axe
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