JUUL e-cigarette maker sees its valuation top $38BMay 18, 2019
Despite criticisms that it’s helping promote an “epidemic” in teen vaping, e-cigarette maker Juul continues to attract new investors, The Post has learned.
Last week, mutual fund giant Capital Re bought a bunch of Juul Labs shares in the secondary market at a price that values the company at more than the $38 billion valuation it fetched in December, sources said.
It’s unclear what Capital Re paid for the shares, but sources noted the price tag pushes Juul above the $38 billion valuation it reached when cigarette-maker Altria invested $12.8 billion in the next-generation tobacco company late last year.
The earlier investment was widely criticized by Altria investors and analysts at its annual meeting this week as being overpriced.
But one source said the investment by Capital Re, which manages more than $1.6 trillion in equity and fixed income assets, could value Juul at close to $50 billion.
Meanwhile, Juul has been working with JPMorgan in a secretive, months-long assignment that has triggered rumors it is planning a new round of fundraising, two sources said.
Juul declined to comment.
The new vote of confidence comes as Juul continues to face down government regulators and prosecutors for allegedly targeting teens.
North Carolina’s Attorney General sued Juul this week saying it’s marketing its vaping products to young people while downplaying health risks of the products.
In October, the Food and Drug Administration raided the company’s San Francisco headquarters after then-FDA Commissioner Scott Gottlieb said there was an “epidemic of youth e-cigarette use.”
This week, a Maryland federal judge ordered the FDA to speed up its review of electronic cigarettes, so it can start regulating the industry.
Despite the regulatory and legal pressures, e-cigarette sales are skyrocketing. US retail sales of e-cigs soared 123 percent for the four-week period ending April 21, compared to the prior year, according to Bloomberg, citing IRI data.
Juul has 71 percent of the e-cigarette market share, Bloomberg said.
Meanwhile, an estimated 3.6 million American middle and high school kids are now reported to be vaping.
Kevin Burns, who became Juul’s CEO in December 2017, has said the company’s mission is to help adult smokers wean themselves off nicotine — not target teens.
“During his tenure, Juul continued to pay people to promote the product in social media seen by millions of kids,” said Matthew Myers, President of the Campaign for Tobacco-Free Kids.
“They engaged in the worst type of corporate responsibility.”
In November, weeks after being raided by the FDA, Juul halted the sales of flavored pods in retail stores and is enhancing its online age verification capacity.
Capital Re did not return calls for comment.
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