JUUL Stock Going Up In Smoke
Juul, the most prominent maker of E-cigarettes, is in the midst of a public firestorm after the company’s products became an underground hit among underage users.
According to the FDA’s National Use Tobacco Survey, 27% of high school students have used a tobacco product, a tremendous rise from the year previous. This trend is also moving counter to the rest of the nation, which has seen a 25% drop in overall smoking rates over the past 10 years.
Teens have attributed the popularity of the Juul devices to the device’s easily concealable nature: Juul E-Cigs are tiny, portable, look like stretched-out USB sticks, and contain flavoring packets that cause the released vapors to smell sweet instead of smoky.
Juul has taken significant steps to defend itself from the public firestorm, such as raising the minimum age of the models the company uses for advertising by 10 years and re-branding the company from a distributor of fun, fruity E-Cigs to a group dedicated to help American smokers switch to a “safer” alternative.
However, it appears the E-Cig giant’s efforts have been insufficient to dodge global backlash.
After numerous teens have fallen ill due to their vaping habits (and to illnesses that traditionally only crop up for traditional smokers far later in their lives, at that), the FDA launched an investigation into the effects of vaping on the body. And while this investiagation has yet to turn over any significant results, it did strike hard at Juul’s public image.
Most importantly, it has gotten state governments talking about the risks of E-Cigs in teens, which has led several states to issue complete bans on the sale of flavored E-Cig cartridges. Other states have gone even further, banning vaping altogether.
President Trump has also suggested a nationwide ban on almost all of flavored vaping products, although this ban has yet to accumulate any significant traction.
But a nationwide ban is far from out of the question, as China and India have recently taken action to completely abolish vaping paraphernalia.
All this bad press has spelled disaster for Altria, a traditional smoking company who recently invested over $12 billion into a 35% share of Juul, making it the legal owner of the company.
In a massive downward trend that began after the FDA launched its investigation into Juul, Altria has lost over 30% of its total stock value since April of this year.
At the moment, it is unclear whether or not Juul will be able to recover from its losses.