3M - Cant Hear From the Bottom

3M - Ticker MMM has been undergoing a lawsuit stemmed from veterans losing their hearing while using specific 3M manufactured earplugs.

They as of recently have been trying to halt these lawsuits which equate to over 230,000 different trials by filing for bankruptcy to block the settlements, which has been blocked and they now appear to be unable to stop the impending storm of settlements coming their way.

https://www.bloomberg.com/news/articles/2022-08-26/3m-cannot-use-bankruptcy-to-halt-230-000-lawsuits-judge-rules

This article is stating that they are looking at over 100 billion in damages to be paid out.

3M also has some crazy block trades coming in with over 450,000 OI on the 200p strike (super deep ITM) opened last week and continues to move upwards in OI.

I have been buying puts on any green this stock has as news continues to pour out and beat this company to a pulp, if they are to not block these settlements 3M will be hurt bad especially on earnings.

I will be playing puts on this for the near term future as it has worked out in the past week or 2.

Any other law people have anything to add i’d love to see some more info added to this thread!

Other sources:

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It looks like they filed an appeal after the decision and have stated they “would fund a $1 billion settlement trust to compensate people suing over the earplugs—a majority of the tort claims”. The decision on this appeal should be another catalyst

The options flow and OI have certainly been very interesting. I haven’t decided to take a position yet and am curious to see how others here are playing it.

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This is solid. I’m going to be keeping an eye on this one.

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In regards to the 470,000 OI 200p, there’s a nearly matching amount for 200c same expiry. I am not familiar with option strategies but is that a hedge for the puts?

I could be reading yahoo finance wrong though!

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It most likely is a hedge for the puts, the difference being how much premium is sank into each, same OI but some of those 200c’s traded for a dollar or 2

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The OI on the 200p has now surpassed 550,000, someone is still piling into this strike every day

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Also for anyone looking for entries on this I’ve been buying 9/16 115p’s above 125 and 127

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Sold a couple here bought from that callout for 25%

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Could the large option volume be explained by this:

It appears to be due to an arb.

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Seems like 3M’s legal troubles are causing layoffs:

Anecodtally, I have a relative that is in sales for 3M and they have quarterly/yearly meeting across North America. Supposedly 3M’s biggest drivers the last two years has been in PPE and with COVID slowing down, the other parts of the business are profitable but not gangbusters.

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Even when spy has been green today 3m continues its digging for oil, will be looking for re entry this week but if you took my call out last week around the 125 127 range you were up huge today

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Started easing into 11/18 100p today, will average down if I need to but when spy has been red 3m has been even more red, might be in these for awhile though.

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I entered some 9/30 120p today,when I saw SPY pushing up hard and 3M hardly moving. They were surprisingly cheap @ 3.66 considering recent movement. I’m waiting to see how the overall market behaves and will add if we start pushing up.

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Setttlement talks happening on Thursday and Friday.

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There’s now 100m shares short on this and average daily volume is only 10m, so I’m guessing theres going to be lots of good put entries like today as shorts take profit.

Closed the 9/16 puts I had today, still holding a couple 9/30 120p. Thanks for the calllout on this sluzzo :pepepray:

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Glad you’re making money on this man, that 125-127 range has paid for puts ever since the thread started, will try again if we push above 120 again as well

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Mediations begin today so could get some news coming soon. The way bloomberg is reporting it though, it sounds like the judge is pissed, they’re an army veteran too unluckily for 3m.

https://www.bloomberg.com/news/articles/2022-09-15/3m-s-failed-legal-move-leaves-firm-back-with-judge-it-criticized

  • 200,000 lawsuits are being prepared around the US
  • So far in 10 test trials the total settlements were over $300m.

“Rodgers accuses 3M of trying to undermine the biggest multi-district litigation case in US history and pledged to investigate the company’s motives. The unusual legal feud will hang over two days of negotiations led by a mediator in Florida who was appointed by Rodgers just seven weeks after she questioned whether 3M made a good faith effort in a previous round of failed mediation. Refusing to negotiate in good faith during a court proceeding can lead to sanctions.”

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3M EARPLUG LAWSUIT UPDATES:

September 19, 2022 Update: There was no settlement from the settlement talks last week. Still, Judge Rodges deemed the mediation “worthwhile and productive…” The court-appointed mediator is scheduling another mediation session to be conducted within the next 14 days. The lawyers are bound by a confidentiality agreement concerning the details of the discussion.

Looking at entering november puts if SPY decides to recover a bit.

Started buying into November 105p’s on this. With more news hopefully to come and more market downturn I think it could be a good play. 117 seems to be the new area it can’t really get over but if it does go over 117 I will be buying these more heavily. Stay green friends!

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