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Altrias chance of writing down juul stake increased materially analysts say
Altria's chance of writing down Juul stake 'increased materially,' analysts say
The chance that Altria writes down the value of its $12.8 billion investment in Juul has “increased materially” amid uncertainty around the e-cigarette industry, Fitch credit analysts say. Altria took a 35% stake in e-cigarette market leader Juul late last year to help offset declining sales in its main business, cigarettes. The number of cigarettes Altria sells has been falling for years with smoking rates declining and existing customers quitting or dying.
Juul’s sales were booming when the deal was announced last December. Altria’s stake valued the start-up at $38 billion. Since then, scrutiny around Juul and the e-cigarette industry as a whole has heightened. State and local lawmakers are banning flavored e-cigarettes, while the Trump administration is readying a plan to remove these products from shelves across the country. An outbreak of a deadly vaping-related lung disease has stoked panic, causing at least some people to reconsider using e-cigarettes.
“The probability Altria impairs the value of its 35% investment in Juul has increased materially due to considerably diminished and uncertain e-vaping growth prospects,” Fitch analysts Bill Densmore and Carla Norfleet Taylor wrote in a note Tuesday. Sourced through Scoop.it from: www.cnbc.com Juul's share prices are plummeting I wonder what the next more will be for the Altria?