Investors should watch the trading action in companies that face lawsuits from the government. Adobe Systems (ADBE) must defend itself from accusations from the U.S. government.
The Federal Trade Commission said that Adobe buried fees that could amount to hundreds of dollars in some cases. Additionally, it made it difficult for customers to notice important terms in its annual paid monthly subscription plan. The FTC cited early termination fees as high as 50% as an example of harming consumers.
ADBE stock erased some of its post-earnings rally. The stock traded as high as around $533, up from $460, after posting quarter results. It closed at $518.74 on Monday.
In the drug sector, Pfizer (PFE) closed down by 2.0% yesterday, leading to trading seven straight days lower. Kansas accused Pfizer of misleading the public about its Covid vaccine. In a lawsuit, the U.S. state of Kansas said that Pfizer hid risks about the vaccine. It also made false claims about the vaccine’s effectiveness.
Risks included complications in pregnancy and inflammation in and around the heart (myocarditis and pericarditis). PFE stock peaked near $30 and closed below $27. It risks re-testing the 52-week low of $25.20 in the coming weeks.
In the EV sector, Tesla’s CEO, Elon Musk, said that the SEC is investigating his disclosure related to buying Twitter stock before he took over the firm. TSLA stock, however, will likely break out to $200.