Vaping is a fad I have no many people that have quit vaping went back to cigarettes. The company said the investment would help Juul run its business operations, while it goes ahead with its administrative appeal of the U.S. Food and Drug Administration's marketing denial order related to its e-cigarettes. Juul obviously hopes this enormous new settlement will help it regain the trust of regulators and to move forward. At Gray, our journalists report, write, edit and produce the news content that informs the communities we serve. MO is not obviously expensive here at 9.4x earnings but it should be noted that consensus estimates call for minimal top-line growth over the next few years. By Associated Press. Tesla built its first Cybertruck at the electric-vehicle marker's plant in Austin, Texas, the company said in a tweet on Saturday, after two years of delays. French dairy group Danone is reviewing its legal options after the Russian state took control of its subsidiary in the country, a source close to the matter told Reuters on Monday. See here for a complete list of exchanges and delays. A list of some new chapter 11 bankruptcy filings made during the last week. Analysts Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. That same month the companys largest investor, tobacco giant Altria, announced plans to resume competing on its own in the e-cigarette space. Bloomberg via Getty Images " [T]he company must stop selling and. He's also seeking damages. Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile. Juul and other e-cigarettes have been blamed by health officials for fueling a surge in nicotine consumption among young people. Winners and losers from the second fundraising quarter, Turning Point attendees meet Asa Hutchinson with boos, chants of Trump, Teamsters chief asks White House not to intervene if UPS workers strike, Trump seeks unprecedented delays as he battles prosecution. As of the latest quarter, that investment was worth only $450 million, representing a drawdown of 96%. Juul looks to be a step closer to a potential bankruptcy filing as it reportedly explores financing options while battling the Food and Drug Administration over whether it can keep its e-cigarettes on the U.S. market. (Reuters) - Telecommunications and power contractor QualTek Services said on Friday that it has emerged from . Juul has reached settlements with 48 states for a total of more than $1 billion, as well as settling more than 5,000 private litigation cases brought by roughly 10,000 plaintiffs, the company said in a statement following a separate settlement on Wednesday. After its $12.8 billion investment in JUUL, the companies initially had a non-compete agreement which stipulated that MO cannot develop its own e-vapor products. While volatility is always possible, I am doubtful that MO can see a significant re-rating due to the intuitive appeal of the bearish thesis - just as one wouldn't count on the rise of cable television or the movie theater business, it is equally difficult to count on the rise of cigarette smoking. Embattled vaping company Juul Labs announced layoffs Thursday, Nov. 10, 2022, as the company tries to weather growing . Facing a looming ban of its products and an avalanche of costly lawsuits, the once-popular e-cigarette manufacturer is on the cusp of filing for Chapter 11 bankruptcy protection, according to numerous sources.. But that investment haslost more than 95% of its valueas Juuls prospects have dimmed, giving Altria the option to exit its non-compete agreement. MO remains a shareholder return story as the company has returned $4.4 billion to shareholders through the first half of this year, representing a 5.3% shareholder yield. Billionaire Cameron Winklevoss, co-founder of the Gemini Trust Co. crypto platform, outlined what he termed a "best and final offer" for digital . That means Juul could soon be forced to battle for space on retail shelves with Marlboro-maker Altria, along with long-standing competitors like Reynolds Americans Vuse, which recently edged past Juul to become the leading U.S. vaping brand. Given the high rates of inflation and rising interest rates, that moment may be as near as ever. But following an appeal, the health regulator put the ban on hold and agreed to an additional review of Juul's marketing application. My bearish assessment remains and has increased after the increased prospects for a JUUL bankruptcy. But on September 30th, MO disclosed in an SEC filing that it planned to end that non-compete agreement. 0:05. For the best Barrons.com experience, please update to a modern browser. The FDA said Juul did not adequately address key questions about the potential for chemicals to leach from its device. Fox Business Flash top headlines for Nov. 23. ", JUUL PAYS $40M IN NORTH CAROLINA VAPING LAWSUIT, Juul admitted no wrongdoing in settling the case and called it "another step in our ongoing effort to reset our company.". Klicken Sie auf Alle ablehnen, wenn Sie nicht mchten, dass wir und unsere Partner Cookies und personenbezogene Daten fr diese zustzlichen Zwecke verwenden. That means Juul could soon be forced to battle for space on retail shelves with Marlboro-maker Altria, along with long-standing competitors like Reynolds Americans Vuse, which recently edged past Juul to become the leading U.S. vaping brand. All quotes delayed a minimum of 15 minutes. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body. Financial terms of the settlement were not. Thousands of city employees and retirees lost big on July 18, 2013, when a state-appointed manager made Detroit the largest U.S. city to file for bankruptcy. The FDA has placed a temporary hold on its initial decision while Juul files an appeal. our Subscriber Agreement and by copyright law. The FDA said Juul did not adequately address key questions about the potential for chemicals to leech from its device. Price competition is likely to heat up, hurting MO's ability to continue increasing prices. Hyatt Hotels heir Nick Pritzker and California investor Riaz Valani are considering putting up money to cover the e-cigarette maker's operations and near-term legal liabilities, the report said. The company has managed this dynamic for the last 20-30 yrs. I have no business relationship with any company whose stock is mentioned in this article. Financial terms of the settlement were not disclosed, but Juul said that it has secured an equity investment to fund it. This material may not be published, broadcast, rewritten, or redistributed. Juul did not immediately respond to a Reuters request for comment, while parent Altria Group (MO.N) deferred questions to Juul. I think this analysis is a little too bleak. E-cigarette company Juul Labs is looking for funding to finance its potential bankruptcy process, Bloomberg reported.Though the company has not confirmed the news, rumors are abuzz that it would soon apply for bankruptcy after the U.S. Food and Drug Administration issued an MDO (Marketing Denial Order) in June for Juul products in the domestic market. Juul products are displayed at a smoke shop in New York, on Dec. 20, 2018. While that risk has moderated at least for now, I continue to question whether investing in MO is the best use of capital. I don't see price elasticity or a fall of of demand being a significant issue. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers. According to a report by Bloomberg News published this week, JUUL Labs has begun talking with bankruptcy lawyers regarding debtor-in-possession financing, which is a step in preparing for a . Israeli president to address Congress as Democratic divisions over Israel break Ex-Secret Service agent not surprised about White House cocaine incident. Juul rocketed to the top of the U.S. vaping market five years ago on the popularity of flavors like mango, mint and creme brulee. Exclusive news, data and analytics for financial market professionals, Reporting by Juby Babu in Bengaluru; Editing by Devika Syamnath, Analysis: Bank of Canada hones messaging as inflation defies forecasts, Yellen does not see recession in U.S. - Bloomberg interview, Dollar steadies after biggest weekly loss this year, Wall St inches up as investors await more earnings, Exclusive: Danone reviews legal options after Russia seizes local business, Marriott enters licensing deal with MGM to boost presence in the Las Vegas strip, U.S. chip lobby presses Biden to refrain from further China curbs, Russian inflation expectations jump to 11.1% with rate decision imminent, Ukraine wants use of Black Sea grain corridor to continue. Distribution and use of this material are governed by The industry leader for online information for tax, accounting and finance professionals. Belonging in the workplace: what does it mean and why does it matter? Im sure the bankruptcy would be structured to eliminate further lawsuits against JUUL. July 10, 2023 4:01 pm ET | WSJ Pro. MO reaffirmed full-year guidance of up to $4.93 in adjusted EPS. The day that the news broke MO stock was up and was not impacted. Unable to secure additional funding to support its operations . The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. One chart I like to reference is one that MO has presented a few times over the years, and it's called the "Tobacco Space Estimated Volume" chart. .css-16c7pto-SnippetSignInLink{-webkit-text-decoration:underline;text-decoration:underline;cursor:pointer;}Sign In, Copyright 2023 Dow Jones & Company, Inc. All Rights Reserved, Save up to $15 with TurboTax coupon May 2023, Epic Bundle - 3x Expert Stock Recommendations, 15% OFF DIY Online Tax Filing Services | H&R Block Coupon, 10% TopResume Discount Code for expert resume-writing services, Groupon Deal of the Day - July: Up to 91% OFF w/ Groupon Coupon. If it takes many years before this scenario plays out, then the ongoing dividend payments can still enable the stock to deliver positive total returns, but I am doubtful that MO can beat the market over long time horizons even accounting for the elevated dividend yield. Dec. 7, 2022, 4:52 PM UTC By The Associated Press Juul Labs has reached settlements covering more than 5,000 cases brought by about 10,000 plaintiffs related to its vaping products. In July, the company said it was in the early stages of exploring options including financing alternatives, as it had to deal with lawsuits related to marketing of its e-cigarettes. In June the Food and Drug Administrationrejected Juuls application to keep its product on the marketas a smoking alternative for adults, throwing its future into uncertainty. Juul Labs on Thursday said it has secured enough new financing to avoid bankruptcy, but warned of an upcoming "reorganization" that will include layoffs. The FDA has placed a temporary hold on its initial decision while Juul files an appeal. I hold MO, IMBBY and BTI and am glad that they are doing so well right now. High conviction investment ideas in the winners of tomorrow. Financial terms of the settlement were not disclosed, but Juul said that it has secured an equity investment to fund it. MO had previously made a $12.8 billion investment in JUUL, giving them a 35% stake. for now, I continue to question whether investing in MO is the best use of capital. As the companys spokesperson noted in their statement, the Food and Drug Administration (FDA) briefly banned the sale and marketing of Juuls e-cigarettes over the summer as part of the agencys efforts to tamp down on youth vaping. They don't need to worry about expanding into cannabis or vaping and making stupid decisions in the billions of dollars. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. I continue to express the view that there will be a certain price at which consumers would either switch brands or quit smoking altogether. April 12, 2023. WBAL NewsRadio 1090/FM 101.5 - Arizona's attorney general is suing cigarette giant Juul Labs for alleged violations of state consumer fraud laws Maybe I'll start smoking at $500 a pack. For non-personal use or to order multiple copies, please contact Juul Labs Inc. is in talks with two of its biggest investors on a bailout that could help the e-cigarette maker stave off a bankruptcy filing, according to people familiar with the matter. Juul has reportedly been working with advisors on restructuring and financing as it faces thousands of lawsuits. Especially since the company already lost about 20% of its capitalization in June. Listen. A judge is expected to soon review and approve the settlement. IE 11 is not supported. The stock yields over 8%, but investors may be underestimating the tail-end risk. 2023 FOX News Network, LLC. I don't think there is any price that will cause smokers to stop smoking, but I do think there is a price that will prompt non-smokers to start smoking (a lot higher than current prices). Yet, in this case, it is the difficulty of material upside which makes the potential downside all too important. Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks. "Todays settlement holds Juul accountable for its irresponsible marketing efforts that pushed Arizona minors toward nicotine and the addiction that follows," Brnovich said in a statement. Settling the thousands of lawsuits Juul has been hit with for its marketing strategies and addictive products is a critical priority to secure certainty for our future, a company spokesperson told Forbes on Monday. My investing strategy for the current market. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. In November 2022, the company lay off 400 employees and narrowly avoided filing for bankruptcy. Although it's one of many states to file a complaint against the company, Minnesota was the first state to take the manufacturer to trial. Basically, Altria's growth works like the reassuring tick of an antique grandfather clock in a slow-growing tobacco market. Arizona Capitol Times Your Inside Source for Arizona Government, Politics and Business The . In June the Food and Drug Administration rejected Juuls application to keep its product on the market as a smoking alternative for adults, throwing its future into uncertainty. Julian Lin runsBest Of Breed Growth Stocks, a research service uncovering high conviction ideas in the winners of tomorrow., Get access to hishighest conviction ideas here.. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. But that investment has lost more than 95% of its value as Juuls prospects have dimmed, giving Altria the option to exit its non-compete agreement. Powered and implemented byFactSet Digital Solutions. Sie knnen Ihre Einstellungen jederzeit ndern, indem Sie auf unseren Websites und Apps auf den Link Datenschutz- und Cookie-Einstellungen oder Datenschutz-Dashboard klicken. 1:36. The demand increases as the price increases. Entering text into the input field will update the search result below. 87990cbe856818d5eddac44c7b1cdeb8, Continue reading your article witha WSJ subscription, Already a subscriber? In late September, Marlboro maker Altria Group Inc , which partly owns Juul, exercised the option to be released from its non-compete deal with the e-cigarette company almost four years after buying a 35% stake in the company. That view has proven true in the past as evidenced by the company's 52 consecutive years of dividend growth. Biggest issue with stock is the current administrations unpredictable policys, risks remain until a regime change. Smokeageddon was unprecedented. Arizona Attorney General Mark Brnovich on Tuesday sued Juul and another e-cigarette maker, Eonsmoke, alleging the companies targeted youths with advertising and flavored products.Brnovich wants injunctions to prevent either company from using marketing tactics that target youths or sell flavored vape products. Nov 10 (Reuters) - Juul Labs Inc has secured an investment from some of its early investors that will keep the e-cigarette maker in business, the company said on Thursday, adding that it will. The valuation is admittedly more attractive than it has been in quite some time and my bearish case may still take many years to take place. This weeks settlement resolves most of those cases, which had been consolidated in a California federal court pending several bellwether trials. Copyright 2023 Dow Jones & Company, Inc. All Rights Reserved. Juul Labs Inc, backed by Altria Group Inc (NYSE: MO ), has been exploring various optionsincluding bankruptcyafter the FDA issued its marketing denial order.

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