Vaping crisis caught the regulators, Big Tobacco (Altria) and Investment Bankers (Fidelity) completely off guard. Billions of dollars vanished as the mysterious lung illness continue to claim lives.
JUUL, the fast growing Silicon Valley startup that made vaping cool and glamourous, hired high profile celebrities, organized parties at campuses. JUUL’s clever marketing campaign was so successful that it quickly became the dominant market leader with sales reaching $1.29 billion and that attracted the attention of big money managers like Fidelity Investments and Big Tobacco, Altria.
Altria surprised market insiders and investors when they announced a whopping $13 Billion dollar investment in JUUL, at the time it was considered a bold strategic move, unbeknownst to them, parents, college administrators and regulators were increasingly concerned about the rapid rise in vaping then doctors noticed something strange, young healthy people were coming to ER with a strange lung disease. CDC started monitoring and gathering data from around the country and determined that the mysterious lung diseases was caused by vaping.
Latest CDC Report released on October 29, 2019.
Thirty Seven deaths and 1,888 Injuries, cases of e-cigarette, or vaping, product use associated lung injury (EVALI) have been reported to CDC from 49 states (all except Alaska), the District of Columbia, and 1 U.S. territory.
- Thirty seven deaths in 24 states and the District of Columbia: Alabama, California (3), Connecticut, Delaware, Florida, Georgia (3), Illinois (2), Indiana (3), Kansas (2), Massachusetts, Michigan, Minnesota (3), Mississippi, Missouri, Montana, Nebraska, New Jersey, New York, Oregon (2), Pennsylvania, Tennessee (2), Texas, Utah, and Virginia
CDC/FDA still don’t know the exact cause of the illness, no single product has been identified and JUUL products are not linked to any deaths or illness. However, regulators decided to warn against vaping and considering a ban on flavored vaping products, JUUL voluntarily stopped selling flavored products at retail stores and introduced strict age verification system. The problem for JULL is that 80% of its revenues came from the flavored products and that’s why Altria has no choice but to cut the Value of JUUL by $14 billion and wrote off a whopping $4 billion dollar in a matter of few months.
Editor’s note:
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