Oct. 31 (UPI) -- U.S. tobacco giant Altria said Thursday it has written down its investment in electronic cigarette company Juul by nearly $5 billion -- significantly less than its initial investment last year.
Altria said last December it was investing nearly $13 billion in Juul for a 35 percent stake. At the time, the company valued the e-cigarette maker at $38 billion.
Its earnings report Thursday showed Altria recorded a $4.5 billion pretax charge against third quarter earnings -- valuing Juul at about $24 billion.
Juul has struggled with sales since announcing this month it would suspend U.S. sales of all non-tobacco and non-menthol-based e-cigarette flavors -- a response to the Trump administration's proposed ban on flavored products.
Juul halted selling flavored e-cigarettes last year to mitigate underage sales. Altria said Thursday the write-down was a pre-emptive reaction to current policy trends concerning e-cigarettes, or "vaping."
"While there was no single determinative event or factor, Altria considered impairment indicators in totality, including: Increased likelihood of U.S. Food & Drug Administration 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 earnings report said.
A former Juul executive this week filed a lawsuit that said the company shipped 1 million contaminated vaping "pods" earlier this year without informing customers. Siddharth Breja, Juul's former vice president of global finance, filed the complaint in U.S. District Court in California.
The lawsuit says Juul acted "in total disregard for the law, public safety and public health" by sending unsafe products to market.