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Investors in the e-cigarette giant, Juul, are seeing their market valuations go up in smoke as the Trump administration prepares to ban the company's best-selling product, the mint-scented pods.
Investors at the San Francisco Private Company have cut their selling price by over 25% in recent weeks – thanks to a series of bad news that ended Wednesday with Trump's Secretary of Health and Social Services who stated that the agency was working with the agency. the FDA to ban all flavored e-cigs amid a string of vaping-related deaths.
Juul mint-flavored pods accounted for 75% of total sales in August, according to Nielsen's proprietary data obtained by The Post.
The resulting stock price slump was so severe that 35% of Juul bought by Philip Morris's parent company, Altria, last year is now at risk of being flooded, according to investors familiar with these transactions. .
This is because bidders are reluctant to pay more than $ 220 per share – well below the price of $ 249 that Altria paid in connection with a transaction last December that assessed the e-cigs vendor at 38 billions of dollars, indicated sources close to offers.
"There has been a lag between buyers and sellers and not much has happened," said Tim Sullivan, chief executive of Oceanic Partners, a brokerage firm at The Post.
At the beginning of September, sellers asked buyers to pay between $ 360 and $ 280 a share, according to investors familiar with the transactions. In June, the title was selling for between $ 305 and $ 235, and the last exchange, at $ 267, took place in August, said one person informed of sales.
But Tuesday, a seller claiming just $ 261, or $ 170 million, put on the market a single block of 595,000 shares, price that bidders were wary of hitting, according to another investor aware of it. offer.
Juul refused to comment.
The price of the slippage follows a series of regulatory pressures that began with the Food and Drug Administration's Monday note that Juul had criticized Juul for selling his nicotine products as a safe alternative to smoking.
Two days later, the Centers for Disease Control warned people to stay away from electronic cigarettes, claiming that they were investigating hundreds of diseases related to vaporization. Six deaths have also been reported in six states, including New York.
A few hours later, HHS secretary Alex Azar dropped the big bomb when he announced his intention to ban flavored pods during an appearance in front of an oval office alongside the President and First Lady Melania Trump.
It is unlikely that Altria is the only investor burned by regulatory threats. In August, Juul raised $ 785 million in an investment round led by Poseidon Holdings, a venture capital fund focused on tobacco and weeds, in an investment that valued the company at a higher undisclosed amount. to December, according to data from the research company Pitchbook.
And as The Post reported in May, Capital Reinsurance, a unit of Capital hedge fund group, bought Juul shares in the secondary market for more than $ 300 a share. The seller of these shares was Fidelity Investments, one of Juul's first investors, sources told The Post.
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