Bayer stock doubles for forum user after crash

Bayer investment doubles, says forum user

There was an enthusiastic recommendation. Then, another 30% drop and a string of jokes. Over time, the German stock has posted gains that one forum investor claims to have turned into more than +100%. Bayer's journey from being labeled "free money" by some to becoming a hot commodity illustrates a value shift from a liability-laden corpse to a desirable asset, leaving skeptics scrambling for explanations and believers demanding results.

The story is summarized by three key prices: €18.74, the price at which one user admits they timed it right; €21, the entry point for another who argued the company was a bargain at those levels; and €25.80, the level where the stock marked +7% as the market began buying the narrative of calm.

Why did Bayer drop another 30% after the recommendation?

The short answer is Monsanto. The acquisition of the agrochemical giant left Bayer with a heavy debt burden and a mountain of glyphosate-related lawsuits that continue to impact every quarter. One forum user noted the Altman Z-Score at 0.72, reminding others that any value below 1.81 enters a danger zone for imminent bankruptcy according to this model, with an accuracy rate he estimated around 72% two years in advance.

This was one argument used by skeptics. In response, another user pointed out that "it is another matter if the German government won't let it fail." This may be true but could be irrelevant for shareholders.

The legal front also weighed heavily: most lawsuits were won, yes, but several were lost, and the entire company's value once fell below what Monsanto originally cost. That detail disrupts any optimistic thesis built on the balance sheet.

Support at €14.50 and resistance at €45

For chart traders, the signal came before the news. The stock spent two months bottoming out, drawing a double bottom with a rising peak above the previous one, then jumped upward. This reversal pattern pushed many to enter and set specific levels: support at €14.50 below and a "doubly hard" resistance at €45, where horizontal and trend lines coincide. Until that zone is clearly broken, they warn, volatility remains.

Another technical warning indicated the stock remained trapped in a nearly perfect bearish channel, with €45 marking the boundary between a bounce and a trend change. With the stock at €25.80, the distance to that boundary remains the argument for those preferring to wait.

US Supreme Court and Roundup litigation

The catalyst that changed the tone was judicial, coming from Washington: the US Supreme Court will review Bayer's attempt to limit herbicide-related claims.

A political reading emerged in parallel: money flooding into Germany and a return to Russian gas to regain competitiveness. "Money and peace hand in hand," summarized one user. Another noted that the weekly gain of over 5% was due more to this arrival of calm than to the company itself.

What is Bayer worth if it earns €10 billion a year?

The bullish case arithmetic rests on one figure: if the company moves past asset impairments and goodwill, it would earn about €10 billion annually. With a market cap that reached €20 billion, this equates to a P/E ratio of 2. Applying a multiple of 10, the valuation would go to €100 billion, meaning a 5x return over three to four years, according to one user's calculation.

Against this weighs the sector argument: fierce competition exists in pharma, with better-reputed alternatives, and burned investors tend not to return to the source of their pain. A stigmatized sector with a moat is one thing; a stigmatized sector with open litigation is another.

Here fits a useful comparison for dividend-focused investors, with net annual return figures presented by one user:

• National Grid: 11.28% net
• China Mobile: 9.33% net
• Ping An: 7.34% net
• Hamborner REIT: 7.35% net

Bayer does not play in that league. Its game is capital appreciation, which is why the same investor boasting about dividends acknowledged that with Bayer, they had already achieved enough: after trimming the surplus, more than +100% and the position closed.

The unsettling data point

The uncomfortable figure remains: against calculations predicting bankruptcy danger, one forum investor claims to have exceeded +100% with their position. Models are often accurate but explain little.