Business | Altria Takes a $ 4.1 Billion Hit on Juul Stake
Following an earlier write-down of $ 4.5 billion, the tobacco giant’s stake in the vaping start-up is now worth a fraction of what it paid in 2020.
Altria reported a $ 4.1 billion write-down on its Juul Labs investment on Thursday, another sizable charge as the vaping crisis continues to roil the e-cigarette industry.
The company now values its 59 percent stake in the e-cigarette company at $ 4.2 billion, a significant drop from the $ 20 .8 billion it paid (in December) . Three months ago, Altria, one of the world’s largest tobacco sellers, devalued its investment in Juul by $ 4.5 billion.
Altria, the maker of Marlboro cigarettes, said its fourth-quarter charge was largely because of the growing number of legal cases pending against Juul, which increased by more than (percent since the end of October.)
Howard Willard, chief executive of Altria, said that despite “the unexpected challenges” Juul faces, the company had made progress in its noncombustible platform with the IQOS e-cigarette and on nicotine pouches.
“We enter ”) with continued focus on harm reduction, ”he said in a statement.
Thousands of Americans have been sickened by lung illnesses tied to vaping and at least people have died, prompting the American Medical Association to call for a ban on the products. Juul has been hit with lawsuits by federal agencies and state attorneys general, who contend that the company targeted young peopl e with deceptive marketing, including nicotine pods with flavors like mango.
The Food and Drug Administration announced partial ban on flavored pods this month, forbidding the sale of most flavors but exempting menthol and tobacco flavors.
Altria bought its stake in Juul as it was looking to shift away from cigarettes. The start-up, at the time experiencing explosive growth , was valued at $ billion.