Killer Company (MO) Plans to Kill More

Philip Morris (MO) has tried everything to change its image, including changing its name to Altria, but it is – at its core – a company that markets death.  It knows it, and everyone else knows it, but it does well and lots of people own its stock.  To make it even more attractive, it has a 4% dividend.  But growing MO continues to be a challenge for the company, as all efforts have had to balance prospects of litigation and potential huge settlement costs in America. 

For those who own the stock, the good news is that its board is now about to vote on a “restructuring plan” which would spin off the international side of the business (Philip Morris International) so as to be free to capture more and more of the international market without having to worry about American law suits.  While the American market has been declining a percent or two each year, the international side has remained steady and the possibilities for growth (MO has only about 15% of foreign sales) remain extraordinary. Doing this will certainly increase shareholder value (even if it means an aggressive plan to kill more and more people).

This has always been a tough stock to own if one has a conscience.  With these new plans  -- plans to kill more and more, indeed as many more as possible – it is harder still.  I personally can’t own it anymore.     

Daniel Socolow
Daniel Socolow: President, Socolow Group. Former Director of the MacArthur Fellows Program, President of the American University of Paris, Vice President of Spelman College. BA, MA, Ph.D.

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Comments

  • GFVicoy

    August 26, 2007

    The sale of death is going to come back to bite them all around the world, just as it has in the US. There is a movement spreading across Europe and the world to stamp out smoking, and as it matures that movement is going to turn towards holding MO liable.

  • leon

    August 26, 2007

    I agree with Vicoy. Other countries are going to litigate as well, especially as MO gets more aggressive.

  • Dividend Man

    August 30, 2007

    ...remember folks, in our hyper stress-filled lives at least 25% of the population will be ADDICTED to something...& they will CONTINUE to do so, that's REALITY...it's a "free-will" world here, & even socialist gov't banning will only drive a black market...it's all about MONEY...400 to 500 BILLION worldwide spent annually on "illegal drugs"...legalize 'em all, & we can invest in other peoples' BAD HABITS!!...and besides it's a great form of population control...
    P.S...(since mankind doesn't have a natural preadator, these bad habits fit the need nicely)
    P.S.S...i sleep very nicely getting 5-7% return on my SIN STOCKS--BIG MO, DEO, BUD, etc...happy investing ya'll!!!

  • Peter Than

    August 31, 2007

    dividend man has a good point. Where do you draw the line? Aren't casinos damaging people? What about Countrywide evicting homeowners? Or RIMM phones that probably cause brain tumors? Once your conscience gets going, where do you draw the line?

  • George Polich

    September 01, 2007

    Even if your conscience doesn't bother you, you need to be concerned about the limitless potential liability, especially on MO.

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