Kenvue's Trading Volume Surges to 113th in U.S. Rankings as Shares Plummet 2.5% Amid Legal Battles and $48.7B Takeover

Market Snapshot

On November 17, 2025, Kenvue (KVUE) traded with a volume of $0.91 billion, marking a 56.4% increase compared to the previous day. This elevated trading activity ranked the stock 113th in volume among U.S. equities. Despite the surge in liquidity, Kenvue’s shares fell 2.52% intraday, reflecting investor caution amid ongoing legal and regulatory scrutiny. The divergence between volume and price movement suggests heightened short-term uncertainty, potentially linked to the company’s exposure to litigation and its $48.7 billion pending acquisition by Kimberly-Clark.

Key Drivers

The U.S. Court of Appeals for the Second Circuit’s hearing on over 500 lawsuits against Kenvue’s Tylenol brand emerged as a primary catalyst for the stock’s decline. Plaintiffs allege a link between Tylenol use during pregnancy and autism in children, a claim initially amplified by statements from President Donald Trump and his administration in September 2025. The appeals court questioned whether a lower court had appropriately dismissed these suits in 2024 due to methodological flaws in plaintiffs’ expert testimony. During the hearing, Kenvue shares dropped more than 6% before settling to a 3% intraday loss, underscoring investor concerns over potential liability.

Kenvue’s legal defense of Tylenol’s safety and the scientific consensus rejecting a causal link to autism further complicated the narrative. The company maintains that “science shows Tylenol is safe” and that acetaminophen does not cause autism. However, the appeals court’s scrutiny of expert evidence, including Harvard’s Andrea Baccarelli, highlighted lingering doubts about the strength of Kenvue’s position. A lower court had previously criticized plaintiffs’ experts for “obscuring the complexities” in their data, but the appeals panel’s open-ended questions suggested no clear resolution in the near term.

The pending acquisition by Kimberly-Clark added another layer of complexity. The merger agreement explicitly states that autism-related litigation would not trigger termination. Nevertheless, a favorable ruling for plaintiffs could still increase Kenvue’s long-term liability, potentially affecting the deal’s valuation or integration. Analysts noted that while the acquirer has hedged against such risks, any escalation in litigation costs or reputational damage might indirectly influence the transaction’s timeline or terms.

Separately, a Texas lawsuit by Attorney General Ken Paxton alleging that Kenvue concealed risks associated with Tylenol use in pregnancy further pressured the stock. Although a local court rejected Paxton’s bid to block a $398 million shareholder dividend, the ruling underscored the Texas AG’s aggressive stance. The court’s refusal to impose marketing restrictions on Kenvue left the company’s promotional practices intact, but the litigation remains a reputational risk.

Scientific and regulatory dynamics also played a role. Researchers emphasized the absence of “firm evidence” linking Tylenol to autism, aligning with Kenvue’s public stance. However, the Trump administration’s public endorsement of plaintiffs’ claims created a political dimension, complicating Kenvue’s messaging. The company’s spokesperson reiterated support for the lower court’s dismissal of the cases but faced challenges in countering the political narrative amplified by high-profile figures.

In aggregate, the confluence of legal uncertainty, political amplification of plaintiffs’ claims, and the looming merger created a volatile environment for Kenvue. While the company’s scientific defenses remain intact, the appeals court’s unresolved questions and ongoing litigation highlight structural risks that could persist beyond the current earnings cycle. Investors appear to be pricing in these uncertainties, with trading volume surging as a proxy for heightened speculative activity.