CCTV Transcripts

CCTV Script 25/09/19

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— This is the script of CNBC's news report for China's CCTV on September 25, 2019, Wednesday.

JUUL has stopped recruiting recently and is preparing for personnel restructuring, what's more, some staff may be laid off but the exact size of the cuts is unclear, source told CNBC. This company currently employs 3,900 people, if we describe its development in one word, then that is boom-bust.

JUUL, established in 2017, was under spotlight among the U.S. startups, tobacco giant Altria spent $12.8b to get 35% of its stocks last year, and that means JUUL's market value rose to $38b. At the end of the same year, JUUL who get this investment encouraged it staff with $2b bonus, if there were 1500 employees that time, then everyone can get $1.3m, which can buy a house in San Francisco.

However, just in less than half a year, its situation dives. Regulatory is getting increasingly tight while JUUL is expanding its international markets and employing more people. Now many U.S. fed departments have conducted their investigation and international regulators also put close eye on it.

It was reported that the federal prosecutors in California have launched a criminal probe into JUUL Labs, as well as FDA. At a hearing on e-cigarettes in the U.S. House of Representatives, Anne Schuchat, senior official at CDC warned of dangers of nicotine salts used by JUUL in e-cigarettes as nicotine addiction can affect the developing brain of young people, she also suggested that before the investigation ends, U.S. consumers should avoid using any e-cigarette products. The investigation is going on though; e-cigarette of JUUL and other related vaping products have been impacted in sales. 80% of JUUL's revenue comes from flavored vaping, and that's where the regulatory focus is right now. Big retailers, including Walmart, follow up the sales ban released by regulatory at different levels, stopping selling vaping.

Now people start to review that whether Altria's investment last year was worth it. Altria's stock price is on the down trajectory with the regulatory getting tighter since June, till now, it not only lost all gains notched at the start of this year, but also dropped nearly 18% compared to its price at the beginning of this year. Interestingly, JUUL recently filed a petition with the U.S. international trade commission when regulatory focuses on it.

Asking to ban the overseas competitors from entering American markets as they infringe its patent, and competitors don't pay enough attention on consumer's age, but itself has launched adult verification system to lower e-cigarette's attraction to teens.

Related lawyers commented that JUUL is shaping itself into a good one while accusing other vaping brands.