Big Tobacco investor stock has been in free-fall since the month of April. The reason for this is a Citi Group report which caused much alarm among investors. According to the Citi Group analysis, cigarette market shares are destined to fall with the growth of vaping.
The report was all but confidential, kept away from the general public and had almost no media coverage. However, the report had extreme repercussions on Wall Street. As soon as it was published, investors began massively selling off their Big Tobacco shares.
Three months on and this trend is going strong. This event brings to mind the very poor first quarter of the year for the tobacco industry. Sales for the leaders in the sector fell by almost 6%. Considered until recently a sure-fire investment, shares in these groups are today given the evil eye among investor communities.
Vaping is taking market shares from tobacco
On the American market, this about-face can be symbolised by the growing popularity of Juul. The pod-based e-cig model using nicotine salts is currently very popular across the vendor network. The other nail in the coffin is that nicotine substitutes produced by Big Tobacco are simply not selling. Sold in 38 countries, the Iqos by Philip Morris has only found a steady market in Japan and South-Korea.
This “fire-sale” of big tobacco shares is proof that these industry titans are struggling to remain relevant. Investors don’t believe these corporations are able to transition to electronic cigarettes. Smokers looking for less harmful alternatives are turning to the new brands on the block, specialized e-cig manufacturers.
It seems nothing can stand in the way of falling smoking rates affecting the globe. In the USA, the repeated efforts by Tobacco-Free Kids Campaigners to stop the rise of Juul are not proving effective. From now on, it’ll be interesting to see if Big Tobacco stock continues to plunge until the end of the year.