Cigar stocks fizzle on closer FTC scrutiny
Reuters, Monday, February 09, 1998 at 12:26
NEW YORK, Feb 9 (Reuters) - Shares of Swisher International
Group Inc (NYSE:SWR) and some other cigar makers fell on Monday
after the U.S. Federal Trade Commission said it would take a
closer look at the industry.
Swisher was off 1-1/8 at 13-1/4 in midday trading and
General Cigar Holdings Inc (NYSE:MPP) was off 1/2 at 17-3/8 in
exchange trading.
Another cigar stock down on the news was Holt's Cigar
Holdings Inc (NASDAQ:HOLT), off 1/4 at 7-1/4.
But Consolidated Cigar Holdings Inc (NYSE:CIG), after a brief
dip into negative territory, was up 1/16 at 22-13/16.
Cigar smoking has been a hot trend in recent years, and the
FTC is concerned that the fad is catching on among high school
students.
The agency said it ordered Swisher, Consolidated, General,
Havatampa Inc and John Middleton Inc to report on their sales
and advertising expenditures, as cigarette and smokeless
tobacco companies are required to do.
Havatampa was bought in December by Spanish tobacco company
Tabacalera SA (MADRID:TAB). Middleton is privately held.
Tobacco analyst Emanuel Goldman of PaineWebber said that
cigar advertising expenditures are tiny compared with cigarette
advertising.
"This is small potatoes," he said.
But John Maxwell Jr, a Davenport & Co analyst, said it is
too soon to say what longer-term effect closer FTC scrutiny
would have on cigar share prices.
Copyright 1998, Reuters News Service |
