You can’t say that Philip Morris isn’t persistent. If you’re more than a couple of decades old, you’ll recall numerous attacks to the tobacco giant and their competitors. “Attacks” doesn’t imply these events were unwarranted.

Big tobacco companies like PM had the gall to claim that it was impossible to know if cigarette smoke was linked to cancer. Since then, the company has faced a cultural backlash against smoking. This, combined with the fact that it must be hard to stay in business when you kill your own customers, makes PM’s endurance and growth seem all the more remarkable.

Which brings us to the latest major development in the battle against Big Tobacco. The FDA has announced that it will consider limiting nicotine content in cigarettes to levels that will not cause addiction. Implicit in this statement is that a cigarette that doesn’t cause addiction can scarcely cause the stimulant high that smokers need to get through the day. If all goes as the FDA wishes, cigarettes could become little more than cancer sticks, with no medical/psychoactive/stimulant properties at all. By taking the drug out of the drug, how could a tobacco company possible stay in business?

$MO $PM Death of this industry after the news today?

— Calvin (@cal1928) Jul. 28 at 03:23 PM

Philip Morris competitors took a dive following the announcement (Altria Group Inc (MO) stock -9.4%, British American Tobacco PLC (BTI) -7.8%, Vector Group Ltd (VGR) -4.4%). $PM fell too, but only for a few minutes. Since then it has recovered to cruising altitude as if nothing ever happened. The question is: can it stay that way, or even grow?

This depends upon a number of factors. Here’s how I see it:

1. Philip Morris has extensive international penetration, and this is only going to grow. Even as cigarettes go out of fashion in the United States, there are nations all over the world that PM is just beginning to pursue with intensive marketing efforts. America is a big market, but it is far from the biggest on the world stage. Even if the FDA was successful in essentially sterilizing American cigarettes, there are billions of people worldwide who are, potentially, still in the market for the real thing.
2. On the other hand, the FDA could really pull this off. By placing Nicotine under theControlled Substances Act, they could easily restrict its use in cigarettes. Don’t think they would just “look the other way” either. The American tobacco industry is heavily regulated, with a history of paying substantial fines for corporate misdeeds. A major loss of American customers would not be good for this American brand.
3. A third issue is time. It’s likely that these “conversations” within the FDA will happen slowly, and that further regulation, if it happens at all, will be far off. It’s hard to imagine new policy getting legs under the current administration, as well, much more so than to consider the policy under a liberal government.
4. This is just my own opinion, but I see Big Tobacco as an industry screaming for disruption. Their product is, at its core, a central nervous system stimulant called nicotine that grows in the leaves of tobacco plants to protect the plants from pests and sun damage. It’s a natural product, but it’s not the most efficient CNS stimulant on the market by a long shot. An ever growing array of pharmaceutical stimulants, anti-depressants, and mood stabilizers can scratch the itch for which nicotine used to be the only remedy. Even the growing vape industry is seeing massive uptake in the US, and elsewhere, as nicotine users find a healthier way to smoke or to quit smoking.

$PM is a giant, with an impressive financial history, and excellent dividends. I would not recommend it for the long term holder, however. The price is likely to jump around in the coming weeks and months, so if you are the kind of person who likes to buy the dip, $PM is likely to recover from volatility more reliably than their immediate competitors. Buy and sell accordingly.