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THE HEADLINES

 

TAKING A HIT

Move over mesothelioma, ambulance-chasing lawyers are about to be out here making it rain for Juul victims …

The FDA recently launched a probe into a number of seizures that seem to be linked to Juul usage, and, while there was no direct proof of causality, the three cases did all have one thing in common: the Juul. Sooo, yeah.

But other than that they’re doing ok, right?

On top of that, the FTC announced it is formally investigating Juul’s marketing tactics to prove once and for all that the company was intentionally marketing its products to underage vapers. The investigation specifically focused on Juul’s use of influencers to target the youths and while it has been going on since last September it was just officially announced.

And it seems like any penalty could be more than just a slap on the wrist. The FTC will likely seek monetary damages for the offenses.

Who signed off on this?

It’s not just Juul who will be impacted by the investigation. Tobacco company Altria might be affected as well, as the Marlboro maker bought a 35% stake in the vape-maker last year. The suit was not disclosed at the time, so Altria was unaware of the investigation. Smells like mango and karma to me.

Earlier this week we noted that Altria is looking to merge with Philip Morris, and while it doesn’t appear that the deal is in jeopardy, this certainly doesn’t help.

The pending investigations, and the fact that Juul’s CEO issued a warning that the long-term effects of vaping are unknown sent shares of Altria down 3.5% yesterday.

 

TURNING THE OTHER CHEEK

China is taking the high road … for now. Gao Feng, of China’s Commerce Ministry, said on Thursday that the country is against escalating trade tensions with the US. Gao went on to say that future negotiations would be handled “calmly,” and that US and Chinese officials have maintained “effective” communication. Something tells me China doesn’t fully grasp who they’re dealing with.

Gao did mention that China has the means to retaliate, but currently, it’s focused on getting current US tariffs reduced and/or removed. His comments come after Donald Trump’s threats to raise current tariffs from 25% to 30% on $250B in Chinese goods, and 10% to 15% on an additional $300B in Chinese goods. Trump made the threats in response to China’s previous retaliatory tariffs on $75B worth of US goods.

Hang in there

In response to China’s comments, the US stock market had itself a day. The Dow closed up 326 points, while the S&P and Nasdaq gained 1.3% and 1.5%, respectively. Stocks which act as bellwethers of market health like Boeing and Caterpillar each climbed 0.8% and the good ol’ boys at Deere rose 2.5% on the day.

What’s next?

China and the US are still scheduled to meet in September, and hopefully, iron out a deal that would avoid a catastrophe. Or, Steven Mnuchin could RKO Gao Feng through a table. Who knows …

 

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IN OTHER NEWS

• The EPA has proposed the elimination of federal mandates imposed in 2016 that force energy companies to identify and repair methane leaks at oil and gas facilities. The EPA would divide the oil and gas industry into two segments, where upstream wells would still follow the existing protocol, but natural gas and pipeline segments would be exempt. For the record, methane has 84 times the heat-trapping potential of CO2. *Tree huggers immediately take to social media to voice their displeasure*

 

• “SEE YA.” – Michael Kay. Disney has sold its 80% stake in YES network to an investor group that includes the Yankees, Sinclair Broadcast, and Amazon. Mickey and the gang were required to sell the 22 regional sports networks owned by 21st Century Fox as apart of Disney’s March acquisition of the company. The total enterprise value of the deal is $3.47B.

 

• Cut the deck. Saudi Aramco is considering splitting its IPO into two phases. Phase one would hit the Saudi stock exchange later this year, followed by a second act that would go live in 2020 or 2021. Japan is likely the landing zone for the second phase of the world’s largest IPO, as political uncertainty has knocked the UK and China out of the running. Aramco was the world’s most profitable business with $111B in profits last year and initially planned to raise $100B through its IPO.

 

• Microsoft vendors, led by General Dynamics Corp, won a $7.6B (… $3B of which will be spent on creating an ISIS-hunting Clippy) contract with the Pentagon, Defense Department, and General Services Administration. GDC will provide word processing, spreadsheets, and file sharing solutions throughout this ten-year project, which has been dubbed the Defense Enterprise Office Solutions. It’s worth noting that this is not the coveted $10B JEDI cloud project that Amazon and Microsoft are currently fighting over. Even the armed forces need pivot tables.

 

• Bennett Goodman, the co-founder of GSO Capital Partners, a fund whose parent company is Blackstone, is taking a step back from his role at the hedge fund. After 35 years, he’s leaving to build a family office and explore different opportunities to invest his f*ck ton of money. He’ll step down from his positions of senior MD and board member at the end of the year, but will still advise parts of the Blackstone business. 

 

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