Culture - Philip-Morris and RJR preparing for bankruptcy?

[sylvanshia]

Various sources out there are stating how recent law suites and the raises on sin taxes and the recession are causing both RJR and Philip-Morris the makers of both Camel and Marbolo to prepare for bankruptcy and many are speculating a huge raise in prices for both of these brands... up to 2 dollars a pack. Swim just wants to know how all the swimmers out there feel about this and what they think.

[Alfa]

I very much doubt this. They must have accumulated a bizarre amount of money over the years. Even though they are only making a very small amount per pack in contrary to governments, their sales are massive. So they must have made billions.

[runitsthepolice]

Just because they've made billions in the past does not mean they will be able to avoid bankruptcy. Phillip Morris USA split in to two companies, Altria for sales within the USA and Phillip Morris International dealing with sales abroad. Altria pays $1.28/share dividend to stockholders a year (Dividend is paid .32 quarterly) while PM pays $2.16/share (.54 quarterly) as it stands today. They need to continue to be profitable in order to attract investors. That old money has been paid out over time to shareholders. Bankruptcy also does not mean they go out of business. It allows the company to restructure its relationship with creditors and it's not the end of the world.

Prices in swims state recently changed from 3.50-4 a pack to over $5. Next month it's supposed to increase again. These tobacco companies are bombarded by litigation constantly. It is possible that they could find themselves declaring bankruptcy in the future if this trend continues, although there is no indication that they are preparing to yet. Swim recently quit smoking, but he still would stand up for the rights of smokers everywhere. He hates that the government can tell privately owned restaurants what their patrons can do in their establishments. Any place that serves food around here is non-smoking. Swim thinks that the free market should decide these things.

[sylvanshia]

Another thing influencing it is the HUGE amounts that these companies have had to pay out in law suites especially the most recent one which spurred the talk of bankruptcy.

[old hippie 56]

Similar comparisons to the asbestos companies, they where sued into bankruptcy.
The blackmarket cigarettes will always be around for the diehards that won't/can't quit smoking.