Home Business Altria writes down Juul investment by $4.5 billion

Altria writes down Juul investment by $4.5 billion

13
0


Juul products are displayed at a smoke shop in New York, Thursday, Dec. 20, 2018.

Seth Wenig | AP

Altria wrote down its investment in Juul by about one-third, recording a $4.5 billion pre-tax charge against its third-quarter earnings, the company said Thursday.

Altria said there was not a single event or factor that led to the write down. It cited the Trump administration’s plans to remove flavored e-cigarettes from the market, as well as e-cigarette bans that cities, states and countries are enacting.

Altria invested $12.8 billion for a 35% stake in Juul late last year, valuing the e-cigarette start-up at $38 billion. Regulators still have not approved Altria’s stake in Juul. Altria on Thursday said it expects an answer in the first quarter of 2020.

In the nearly year since announcing the deal, Juul has been embroiled in controversy. The company is largely blamed for fueling an epidemic of teen vaping.

Juul is the subject of numerous lawsuits claiming the company misled minors and addicted them to nicotine, as well as federal investigations into the company’s marketing practices. A former Juul executive filed a wrongful termination lawsuit on Tuesday claiming the company’s quest for profit trumped public health concerns.

Consumers are questioning the safety of e-cigarettes amid an outbreak of a mysterious vaping-related lung injury. The illnesses appear to be related to THC, though a number of patients have reported only vaping nicotine, the addictive chemical in Juul and other e-cigarettes.

The Trump administration is readying a plan that officials said would remove all flavored e-cigarettes from the market until — and if — the FDA reviews and authorizes them for public sale. Juul earlier this month announced it would stop selling most flavors of its nicotine pods.

Longtime Altria executive K.C. Crosthwaite replaced Kevin Burns as CEO of Juul last month. Crosthwaite is shaking up top management, cutting jobs and trying to repair Juul’s image. The company announced it would suspend all product advertising in the U.S. and end its support of a campaign to overturn a San Francisco ordinance that banned the sales of e-cigarettes.



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here