Altria
Late last year, Altria acquired a 35% stake in Juul in the hopes that it would diversify its portfolio. Cigarette use has declined by two-thirds since 1965 among adults and since youth smoking statistics were first reported in 1991, youth smoking rates have declined from 27% to less than 9%. This, combined with the Master Settlement Agreement reached in 1998 between the nation's largest tobacco manufacturers and almost all state governments in the U.S., has led tobacco manufacturers to try to diversify their holdings as tobacco use trends continue to decline.
Despite the decline in cigarette use among American adults, Altria was profitable as recently as last year. Four quarters ago, Altria posted a profit of $1.9 billion on the strength of its premium brands. However, the several billion dollars that Altria has written down as a consequence of the declining value of Juul has caused Altria's total profit to fall precipitously. Consequently, its most recent earnings report has a loss of $2.6 billion. A proposed federal law to ban the sale of flavored e-cigarette flavors and making the only available flavors tobacco and menthol may complicate things further for this large nicotine manufacturer.