ALTRIA APPROVES $13B INVESTMENT IN JUUL, STOCK COLLAPSES

Altria is currently trading at 49.68-lower by 3.35% as compared to the previous closing.

The company announced today that it would pay $12.8 billion to take a 35% stake in e-cigarette maker Juul Labs. The deal values San Francisco-based Juul at $38 billion, more than double the roughly $16 billion valuation it fetched in a July private funding round.

Under terms of the deal, the company is subject to a standstill agreement under which it may not buy additional Juul stocks above its current interest. The cigarette-maker has also agreed not to sell or transfer any Juul stocks for six years from the closing of the deal.

The deal would give the company the right to nominate directors representing a third of Juul’s board. Altria also said that it would participate in the e-vapor category only through Juul for at least six years.

On the technical front, the RSI is currently at 27% and suggests that the market can move in the downward direction. The current price is below the MA5 (51.41). The current price is below the lower band of the Bollinger Bands and is heading downwards.

Overall Bias is Negative and short-term trades can be initiated with tight Stop Loss and Profit targets.

 

TRADE SUGGESTION-LIMIT SELL AT 49.80 TAKE PROFIT AT 49.00    STOP LOSS AT 50.20

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