BAT's $31.5 Billion Write-Off Sends Shares Plummeting
British American Tobacco (BAT) is writing off approximately £25 billion ($31.5 billion) on its US cigarette brands due to the diminishing value of the brands over the next 30 years as more smokers quit, switch to cheaper brands, or adopt smoking alternatives. This announcement caused BAT shares to experience their biggest decline in almost four years. The company also provided a disappointing mid-term guidance, citing challenges in the US cigarette market and increased competition in new categories such as vapes, nicotine pouches, and heated tobacco. BAT is aiming for its alternatives business to break even in 2023 and be profitable next year, but it faces tough competition from upstart Chinese competitors in the disposable vape market.