Be honest—who held on and who didn’t with shares $MMM?

In 2023 many investors were writing the company off. The shares fell by tens of percent and traded just above $70.

Today the situation is completely different and the shares are worth more than twice as much as three years ago.

What happened, how did the court cases unfold, and how did the company get out of the worst of it?

The company 3M $MMM found itself in one of the biggest crises in its history in 2023, mainly due to extensive legal disputes and environmental problems. All this overshadowed its stable business and even more than 100 years of uninterrupted dividend payments. You can read more about the dividend in the article.

The largest lawsuit

The most attention was drawn to a class action by U.S. soldiers who accused the company that its product Combat Arms Earplugs (earplugs supplied to the military) had a design defect and failed to properly protect hearing during shooting.

Up to 260,000 plaintiffs gradually joined the litigation, making it the largest class action in the history of U.S. courts. Several early verdicts awarded the injured very large compensations and investors began to worry that total costs could reach tens of billions of dollars.

Dangerous chemicals

Another major problem were lawsuits related to PFAS chemicals, known as “forever chemicals,” which hardly break down and were found in drinking water in various parts of the U.S. Many U.S. cities and water utilities accused 3M of contaminating water sources and demanded compensation for testing and cleaning the water.

Resolution

During 2023 the company began to address these problems gradually. In June it announced a settlement related to PFAS of up to approximately $12.5 billion, to be paid out over several years.

A few months later another key agreement followed. 3M agreed to the payment of up to $6 billion to settle disputes over the military earplugs. Although these were very large sums, the market took these steps positively, because investors finally gained a clearer picture of the scale of the legal risks.

Changes in approach

The company then announced strategic changes, including ending PFAS production by 2025 and restructuring the business, for example the planned spin-off of its healthcare division into a separate company.

Spinning off a substantial part of the company

3M's healthcare division had long been one of its most profitable segments, focusing on a broad portfolio of products and services for hospitals. 3M $MMM decided to separate this part of the business to simplify the group's structure and allow investors to better value the individual segments. In 2024 a separate company, Solventum $SOLV, was created, whose shares were distributed to existing 3M shareholders. The goal was to create two more specialized companies.

Improved investor perception

After resolving the key legal disputes and announcing restructuring steps, investor sentiment began to gradually improve. They gained greater certainty about the company's future costs and began to refocus on 3M's strong industrial business, stable cash flow, and long dividend history.

100 years of uninterrupted dividend payments!

Yes, that's right. As unbelievable as it may seem, $MMM has, without interruption, paid dividends to its investors for over 100 years straight.

And note, that's not all regarding the dividend. Since 1959 the company increased the dividend every year, which amounted to more than 64 years of uninterrupted dividend growth. However, this long-standing streak ended in 2024, which was related to the spin-off of Solventum $SOLV.

Nothing followed but stock growth

The combination of all these factors led to a gradual shift in the market's perception of the company and shares $MMM began to rise again after the earlier period of steep decline.

So what happened since the lows of 2023? The company got rid of its biggest burden in the form of legal disputes, separated part of its business, and set a clearer path forward for investors.

The shares reacted by rising, up 149% from the nearly $70 level mentioned.