Marlboro Maker Altria Takes $2.6bn Third-Quarter Hit On Juul Investment
Altria Group Inc said on Friday it took a $2.6 billion charge on its investment in Juul Labs Inc in the third quarter, mainly due to lower revenue projection from the e-cigarette maker.
The value of Altria's investment in Juul was $1.6 billion as of 30 September, Altria said.
Reuters had on Thursday reported citing an internal memo that the e-cigarette maker had cut its valuation by about $2 billion at the end of last year.
Juul was valued at $38 billion in December 2018, when Marlboro maker Altria Group Inc took a 35% stake in the company.
The company's new valuation was influenced by recent decisions to exit certain markets and related restructuring costs, according to the memo sent to Juul employees by chief executive officer K.C. Crosthwaite.
"Today's valuation does not surprise me, and I expect other investors to also arrive at lower valuation marks that factor in our recent restructuring," he said.
Juul has been pummeled over the last two years due to increased regulatory scrutiny following a rise in teenage vaping and a ban on the sale of popular flavors have hit demand.
In September, the company said it would make a significant cut to its global workforce and explore pulling out of some European and Asia-Pacific markets to save cash.