Procter & Gamble Shares Plunge 1.97% as Lawsuit Over Kids’ Toothpaste Proceeds

The share price fell to its lowest level since December 2023 today, with an intraday decline of 1.97%.

The stock’s selloff followed a federal court ruling on Nov. 3 allowing a lawsuit against Procter & Gamble to proceed, alleging the company misrepresented usage instructions for its Kids’ Crest toothpaste. The case claims packaging depicts a full strip of toothpaste, potentially misleading parents to overuse the product compared to the American Dental Association’s “pea-sized” recommendation. Procter & Gamble argues federal law preempts such claims, but the litigation aligns with a broader industry trend of legal challenges targeting children’s product designs. A potential loss could trigger legal costs, redesign expenses, or reputational damage, exacerbating investor concerns over short-term volatility and long-term regulatory risks.

Compounding pressures, the company’s recent shareholder-approved 2025 incentive plan, authorizing 175 million shares for executive compensation, has raised dilution concerns. While the plan aims to align leadership with long-term value creation, the issuance of additional shares may weigh on earnings per share. Investors are parsing these developments against a backdrop of heightened legal scrutiny and sector-specific headwinds, with the lawsuit posing the most immediate threat. The congressional purchase of PG shares by Rep. Marjorie Taylor Greene, disclosed on Nov. 6, remains a peripheral factor, offering limited insight into business fundamentals. Collectively, these dynamics highlight the stock’s vulnerability to both operational risks and governance-related market sentiment shifts.