Evolution VC Partners’ and early Juul investor Gregg Smith discusses Juul’s decision to pull flavored products from the market.
Altria Group said on Thursday that it is writing down its investment in e-cigarette giant Juul by about one-third following the Trump administration’s interest in cracking down on vaping.
Continue Reading Below
Virginia-based tobacco company Altria said it recorded a pre-tax charge of $4.5 billion during the third-quarter related to its Juul investment.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MO | ALTRIA GROUP INC. | 45.96 | -0.42 | -0.91% |
“While there was no single determinative event or factor, Altria considered impairment indicators in totality, including: increased likelihood of U.S. Food & Drug Administration (FDA) action to remove flavored e-vapor products from the market pending a market authorization decision, various e-vapor bans put in place by certain cities and states in the U.S. and in certain international markets, and other factors,” the company said in a statement on Thursday.
JUUL HIRES ANOTHER ALTRIA VETERAN
Altria paid $12.8 billion for a 35% stake in Juul in 2018.
The tie-up represented a major reordering of the cigarette industry, which is being roiled by technological innovation and new government regulations. Juul is the dominant e-cigarette player with vaporizers resembling USB sticks and refill pods containing nicotine-laced liquid.
A man exhaling smoke from an electronic cigarette. (EVA HAMBACH/AFP/Getty Images)
Former Juul CEO Kevin Burns resigned in September. His announcement came two weeks after the administration moved to ban flavored e-cigarettes from the market. The White House has blamed flavored e-cigarettes for the “surging” use of the products among teens and young adults. A recent study found nearly one in 10 eighth graders vape.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
FOX Business’ Ken Martin and Jonathan Garber contributed to this report.
