The long weekend seems to have brought Altria’s (MO) investors more negative news, with the commissioner of the FDA seemingly threatening to ban e-cigarettes if teenage use continues rising throughout 2019. His comments that “the entire category will face an existential threat” is particularly concerning for all companies operating in the industry. If this news had occurred only two months ago it would have arguably been considered a positive development for Altria, however, this is no longer the case following their massive $12.8b investment in Juul (JUUL).

If the FDA targets e-cigarettes with new strict regulations or a ban in the worst scenario, it would be a double edged sword for Altria. On one hand there has been concerns that e-cigarettes are taking market share away from the traditional cigarettes that comprise the bulk of their earnings, naturally this concern would be alleviated if they were heavily regulated or banned. Whereas on the opposite hand if such an event occurs, it would cause them to write down a multi-billion dollar portion of their recent Juul investment.

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