The only good news would be that in finally selling JUUL (likely for next to nothing) they will get to realize most of the $12.8 billion paid as a capital loss for tax purposes. However, for corporations, you only get to deduct capital losses to offset other capital gains. You can carry losses back for up to 3 years and forward for another 5 years. My guess is that means that MO will therefore also sell their BUD stake sometime in the next 5 years to generate the capital gain necessary to use up the JUUL capital loss.

 

As I've said, between that and the money they get from PM, MO will have adequate cash to fund buying RRP's like NJOY. And they obviously have strong regulatory relationships in the US. I'm guessing they like vaping largely because it currently has a major excise tax advantage in the US, while heated tobacco sticks are largely still taxed like cigarettes. Doesn't mean it will stay that way, but vape pods and sticks are largely free from excise taxes, other than in certain states that have passed regulations. MO have previously been working with PM to get more favorable tax treatment for IQOS sticks, but that is obviously now all on PM's shoulders, probably with MO actively politicking against it.

 

But even if it takes longer for PM to grow IQOS in the US, the problem remaining for MO is that no one in the world has yet built a "premium" vape product that can consistently maintain higher prices than competitors. There typically isn't enough product difference to do that, and consumers just switch back and forth to whichever supplier is the cheapest, or giving away the devices. So while NJOY has a track record and can sell units, its very unclear it has brand loyalty, and therefore questionable if it will ever be able to generate significant profits. Just like JUUL couldn't either.