TEXT OF STORY
Bill Radke: Toyota said today it still has not decided whether its president will appear before the U.S. Congress. Republican House member Darrell Issa has called on the president, Akio Toyoda,
to testify next week to the House Oversight and Government Reform Committee. Toyota faces a lot of fallout from its recent recalls. Part of it shows up in the stock price, with shares down 20 percent in the last couple of weeks. Marketplace’s Alisa Roth tells us some people will see that as a buying opportunity.
Alisa Roth: Investors have made money before buying stock when companies are in trouble. Johnson and Johnson during the Tylenol crisis, or Merck with the Vioxx drama.
Gary Schatzky is a financial advisor in New York, and he says the difference is those problems were single products:
Gary Schatzky: In this case, Toyota is the name that’s being tarred across virtually all of their lines. We don’t know the magnitude either of the lawsuit losses, the losses to remediate the problem and almost more importantly the losses to their reputation.
Still, Schatzky says Toyota’s a pretty good company. It managed to make a profit during one of the worst car markets ever, and its stock could have fallen more.
Schatzky: Certainly if people are continuing to buy Toyotas and the stock is not getting hammered in the short run, it’s a positive indication for the reputation of the company. But it’s all short run.
In the long run, he says, Toyota’s share price will depend on how well the company manages the damage control. And whether drivers are still willing to buy their cars.
I’m Alisa Roth for Marketplace.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
