Tuesday, September 24, 2019

Several investors want to dump Juul after 35% of stock value vaporizes

September 24, 2019 


Juul shares getting vaped again.

Privately traded stock in the popular e-cigarette maker has plunged by more than a third from late last year’s peaks amid widening fears about health crises and government clampdowns.

Several sizable Juul investors are looking to sell their stakes at prices that value Juul at only about $25 billion, or $175 a share, sources told The Post. That’s a 35% fall from a December deal in which Altria valued Juul at $38 billion, or $270 a share, the sources said.

A Juul spokesman declined to comment Tuesday.

The heart-stopping drop has happened quickly, despite the fact that selling Juul’s closely held shares typically takes a few weeks, as the company’s bylaws require sellers to give existing shareholders a chance to match a given offer.

In August, Juul shares, of which there are 142 million outstanding, traded as high as $267, according to a source.

But since then, a slew of scary headlines have ensued, including reports of at least nine deaths and more than 500 illnesses suspected to be related to vaping.

Earlier this month, US regulators announced plans to pull flavored e-cigarettes off the market — a stunning blow to Juul, whose mint-flavored pods made up 75% of total Juul sales as of August, according to proprietary data from Nielsen obtained by The Post.

The US Attorney in Northern California is also reportedly launching a criminal probe into Juul, according to the Wall Street Journal.

There is now a 20% chance that an all-stock merger being discussed between tobacco giants Philip Morris and Altria won’t happen, Morgan Stanley said Monday, citing “unfavorable regulatory developments impacting Altria’s 35 percent stake in Juul.”

Altria shares, which closed at $40.73 on Tuesday, are down 7% since the Food & Drug Administration announced plans to remove e-cig flavors. Without a merger, Morgan Stanley expects Altria’s shares to could rise 8%. 

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