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Study burns tobacco stocks
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October 18, 1996: 8:47 p.m. ET
Tobacco industry downplays findings, but investors run scared
From Correspondent Allan Dodds Frank
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NEW YORK (CNNfn) -- After 30 years of extensive and grueling searches, scientists say they finally have found the missing piece of evidence linking cigarette smoking to lung cancer.
Anti-smoking activists immediately seized the findings as proof that their claims about the dangers of smoking were true, and investors in tobacco companies were spooked into a sell-off.
Market leader Philip Morris took the hardest hit, dropping 5-3/8 to 92. RJR Nabisco lost 7/8 to 6-5/8, while B.A.T Industries fell 11/16 to 13-7/16, and the Brooke Group shed 1/4 to 4-7/8.
Advocates for both sides of the tobacco fight put different spins on the findings.
Sybil Shainwald, an anti-tobacco lawyer, said cigarette makers may have to dig deep into their pockets soon.
"I think that this definitive scientific evidence will convince judges to let these cases go to the juries and convince juries to award punitive damages against the tobacco industry," she said.
But Philip Morris, RJ Reynolds and Brown & Williamson downplayed the study. Reynolds called the findings "interesting but preliminary."
Melissa Ronan, a tobacco litigation analyst, said since most lawsuits don't dispute the dangers of smoking, the study should have little effect in court. (185K WAV) or (185K AIF)
The landmark study is unlikely to dissuade anyone from smoking, but analysts wonder whether it will increase pressure on Washington for more regulation, and cause investors to flee tobacco stocks.
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