• April 17, 2024

Lawyers Seize on BAT’s Impairment Notice

 Lawyers Seize on BAT’s Impairment Notice
Image: Bits and Splits

British American Tobacco’s recent decision to write down the value of some of its U.S. brands has spawned a frenzy among law firms eager to represent investors who feel shortchanged by the multinational’s move.

On Dec. 6, BAT disclosed that it would take an impairment charge of approximately $31.5 billion after reassessing the value of certain cigarette brands, including Newport, Pall Mall, Camel and Natural American Spirit.

The write-down reflects the diminished outlook for combustible tobacco products, according to BAT. CEO Tadeu Marroco described it as “accounting catching up with reality.”

Following the announcement, BAT’s stock price fell by  8.5 percent, to close at $28.86 per share on Dec. 6, 2023, causing investors to lose money.

At least three law firms, including Frank R. Cruz, Howard G. Smith and Pomerantz, have started investigating BAT on behalf of investors for possible violations of securities laws.

Each of them is encouraging investors to join their legal cases.

While acknowledging the short-term pain, others have praised BAT’s impairment as a realistic move, noting that it would be irresponsible to ignore the reality of a shrinking market for traditional tobacco products.

In a recent op-ed for Tobacco Reporter, Brand Finance Group Managing Director Richard Haigh described the write-down as “a positive step in BAT’s journey toward a resilient future.”