Illustration: Lazaro Gamio/Axios

Altria's decision to pay $12.8 billion last year for a 35% equity stake in vaping giant Juul is turning into one of the worst strategic investments in memory.

Driving the news: Altria on Thursday took a $4.1 billion impairment charge on its Juul investment, mostly blaming the "increased number of legal cases pending against Juul," which it says have increased more than 80% since last November 2019.

  • Add in an an earlier impairment charge, and Altria now values its Juul stake at $4.2 billion — representing a loss of 67%, or $8.6 billion, in just 14 months.

The big picture: Altria and Juul also amended certain non-financial parts of their agreement, including giving Altria an option to exit a non-compete agreement if Juul either gets banned from selling e-vaping products in the U.S. for a year, or if Altria writes down the carrying value of its investment to 10% of the original $12.8 billion price.

  • And, just for one last kick in the teeth, the CEO of Philip Morris said on CNBC that the idea of a reconsolidation with Altria "is finished."

Between the lines: If there's any silver lining here for Juul, it's that Altria did also maintain its commitment "to work together" on pre-market tobacco product applications (PMTAs), and to continue giving it regulatory affairs support.

What they're saying:

"As we continue to reset the vapor category, we are committed to advancing the long-term potential for harm reduction for adult smokers while combatting underage use. We are focused on building a company for the long-term by preparing high-quality, scientifically rigorous Premarket Tobacco Product Applications to earn authorization in the U.S. while we take a methodical approach to our overseas presence."
— Statement from Juul CEO K.C. Crosthwaite

The bottom line: Altria thought its deal for Juul would lift all nicotine-stained boats, kicking off an industry consolidation that would protect all players from changing consumer and retailer tastes. Instead, it might have just blown a $12.8 billion hole in the hull.

Go deeper: FDA issues ban on fruit and mint-flavored vape cartridges

Go deeper

1 hour ago - Science

3 dead and thousands evacuated as Northern California fires explode

A building at the Meadowood Napa Valley luxury resort burns after the Glass Fire moved through the area on September 28, 2020 in St. Helena, California. Photo: by Justin Sullivan/Getty Images

Three people have died in a wildfire in Northern California and tens of thousands were evacuated across the state, as firefighters contended with strong winds and dry conditions that saw blazes explode across the state on Monday.

Driving the news: Shasta County Sheriff Eric Magrini confirmed the deaths occurred as the Zogg Fire spread across 15,000 acres, forcing the evacuation of 1,200 people. More than for 5o,000 people, per AP.

Updated 1 hour ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 9 p.m. ET: 33,273,720 — Total deaths: 1,000,555 — Total recoveries: 23,056,480Map.
  2. U.S.: Total confirmed cases as of 9 p.m. ET: 7,147,241 — Total deaths: 205,031 — Total recoveries: 2,794,608 — Total tests: 102,342,416Map.
  3. Business: Companies are still holding back earnings guidance.
  4. Health: Trump announces plan to distribute 150 million rapid tests —The childless vaccine.
  5. Media: Fauci: Some of what Fox News reports about COVID-19 is "outlandish"
  6. States: Cuomo extends New York moratorium on evictions until 2021.
  7. World: More than 1 million people have now died from coronavirus — India the second country after U.S. to hit 6 million cases.
Dave Lawler, author of World
2 hours ago - World

Global coronavirus death toll crosses 1 million

Data: Our World in Data; Chart: Sara Wise/Axios

The global toll of confirmed deaths from COVID-19 crossed 1 million on Monday, according to data from Johns Hopkins.

By the numbers: More than half of those deaths have come in four countries: the U.S. (204,762), Brazil (141,741), India (95,542) and Mexico (76,430). The true global death toll is likely far higher.

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