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Tobacco company Altria writes down Juul investment by $4.5 billion

By
Clyde Hughes
Altria valued Juul at $38 billion when it bought a stake in the company last year. File Photo by SarahJ1/Pixabay/UPI
Altria valued Juul at $38 billion when it bought a stake in the company last year. File Photo by SarahJ1/Pixabay/UPI

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.

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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.

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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.

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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.

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The lawsuit says Juul acted "in total disregard for the law, public safety and public health" by sending unsafe products to market.

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