Monday, November 25, 2019

CEO Daily: The Sordid Tale of Juul

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November 25, 2019

Good Monday morning.


The Sunday New York Times yesterday did a deep dive into the sordid tale of Juul—a company that started with good intentions—weaning smokers from cigarettes—but ended up hooking millions of young people on flavored nicotine products.


"We never wanted any non-nicotine user and certainly nobody underage to ever use Juul products," co-founder James Monsees testified to Congress in July. But the Times story shows the emptiness of that statement. Teenage use was evident from the earliest days, and the product's ad campaign chased after young people on social media, in Vice magazine and at pop-up "Juul bars" at concerts.


The game worked for a while, and enabled Juul to win a $13 billion investment from tobacco maker Altria last December, valuing the company at a stunning $38 billion. But a raft of lawsuits and regulatory actions have changed the picture. Juul now looks poised to pay a heavy price—as well it should.


Also this morning, Fortune's Vivienne Walt looks at how some financial firms are finding a new home in Amsterdam, in the wake of the Brexit debacle. The story is in the December issue of Fortune magazine, but available online this morning here.


More news below.



Alan Murray
@alansmurray
alan.murray@fortune.com


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TOP NEWS


Bloomberg In


Michael Bloomberg has finally entered the already-crowded race to be the Democratic presidential candidate next year. He's going to skip the earliest primaries in Iowa, New Hampshire, South Carolina and Nevada, and focus his efforts on the March 3 "Super Tuesday" polls, in which 15 states will vote. Bloomberg: "I'm running for president to defeat Donald Trump and rebuild America. We cannot afford four more years of President Trump's reckless and unethical actions." Politico


LVMH and Tiffany


Tiffany is being taken over by the European luxury conglomerate LVMH Moët Hennessy Louis Vuitton. The $16.2 billion deal is in part a bet on rising luxury consumption in China, where Tiffany is building multiple flagship stores. It's also LVMH's biggest buy yet—CEO Bernard Arnault's previous record was $13 billion for Dior a couple years back. Wall Street Journal


China IP


Futures are up after China made what can be interpreted as a concession in the trade war: it will significantly raise compensation limits for intellectual property rights violations. The plan is to have an improved IP protection framework in place by 2025. Asian and European markets rose following the news. Bloomberg


Nationalization Hedge


Polls suggest the U.K.'s opposition Labour Party won't be coming to power at next month's general election, but it seems British power firm SSE isn't taking chances—it's created a Swiss holding company for its electricity distribution and transmission business. Labour wants to nationalize some of the U.K.'s electricity infrastructure, among other things. Reuters



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Content From Deloitte

Jolly Holiday Shopping Season


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AROUND THE WATER COOLER


Recession Fears


Two-thirds of Americans think a recession is coming next year, according a new poll conducted by Fortune and SurveyMonkey—the fear is notably higher among Democrats than it is among Republicans. The research also shows that only one in 10 respondents have cut their spending budget in the last year. Fortune


Fixing the Web


Web inventor Tim Berners-Lee has launched a "contract for the web" scheme that is backed by Facebook, Google and Microsoft. The contract promotes user privacy and universal Internet access. World Wide Web Foundation CEO Adrian Lovett: "We're launching the contract for the Web for the world's first-ever global action plan to protect the Web as a force for good, bringing together companies, governments and citizens from around the world to say these are the things that need to be done to put things back on the right track." CNBC


Reshaping Banks


Europe's biggest investment banks have been pulling away from Wall Street and its regulatory glare. Barclays, Deutsche Bank, Credit Suisse and UBS have in recent years collectively cut $280 billion of assets from their main U.S. holding companies, with much of it being shifted into lighter-regulated U.S. branches. Financial Times


Against GDP


Economist Joseph Stiglitz wants to see the gross domestic product metric retired. The Nobel laureate says GDP is inadequate for the task of measuring economic progress because it fails to reflect inequality, resource depletion and environmental degradation. Stiglitz: "If we measure the wrong thing, we will do the wrong thing. If our measures tell us everything is fine when it really isn't, we will be complacent." Guardian


This edition of CEO Daily was edited by David Meyer. 



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