Juul, the popular electronic cigarette brand, has risen exponentially over the past few years. Here is everything you need to know about the Juul stock.
In this article:
- Which Company Owns Juul?
- Who Bought Out Juul?
- How Much Did Altria Invest in Juul?
- Is Juul a Publicly-Traded Company?
- What Is a Juul Stock Worth?
Juul Stock | Frequently Asked Questions
Which Company Owns Juul?
Juul Labs, Inc. is an electronic cigarette company that sprung out of Pax Labs as an independent company in 2017. Pax Labs is a maker of vaporizers based in San Francisco.
Pax, which was formerly called Ploom, was the brainchild of co-founders James Monsees and Adam Bowen. Both are design program graduates from Stanford University.
The Juul packages nicotine salts from leaf tobacco into one-time use cartridges. Each cartridge, otherwise known as a Juul pod, also contains a mix of glycerol and propylene glycol, flavorants, and benzoic acid. These pods come in different flavors like creme brulee, fruit medley, and cool mint.
Bowen said that the Juul packs a “bigger punch” compared to similar products in the market. It contains as much as 10 times more nicotine than other e-cigarette brands out there.
Introduction of Juul to the Market
On June 1, 2015, Pax Labs introduced the Juul electronic cigarette, which uses a proprietary blend of nicotine that the Juul team developed.
Two years later, Juul Labs was introduced as an independent company headed by Tyler Goldman, former CEO of PAX Labs.
The company continued to grow as its products became more and more popular. From 200 employees in September 2017, its employee base grew to 1,500, as of December 2018.
Who Bought Out Juul?
Juul Labs, Inc. remains the majority owner of the company and was not bought out by any company. As mentioned earlier, however, 35% of it now belongs to Altria. The deal doubled Juul’s value and pegged it at $38 billion.
Altria Group, Inc., maker of the Marlboro cigarette, is the producer of some of the world’s largest cigarette and tobacco products. It’s the parent company of Philip Morris USA, US Smokeless Tobacco Company, Inc., John Middleton, Inc., among others.
Prior to Altria’s investment in Juul, cigarette smoking has been declining and the number of people switching to electronic cigarettes was on the rise.
According to Wells Fargo Securities, Juul Labs has over 70% of all e-cigarette revenue in the market as of December 2018, a staggering growth from 13.6% in early 2017.
How Much Did Altria Invest in Juul?
Altria invested $12.8 billion in Juul, and now owns 35% of the company. Juul Labs remains independent, but Juul now has access to the services and infrastructures of its investor.
- It gives Juul access to Altria’s more prominent distribution channels, such as convenience stores and traditional retail channels.
- It also allows Juul to tap into Altria’s sales network, particularly through advertisements in traditional cigarette packs and direct mailers to customers.
- The deal brings Altria’s years of lobbying expertise in Washington. This benefits Juul, especially since the company is facing heightened federal scrutiny because of its popularity among teenagers.
The terms of the deal also emphasize that Altria may not buy additional Juul Labs stock more than its current interest. Altria also agreed not to sell or transfer Juul stock, nor to participate in any other e-vapor category, for at least six years.
While this deal has raised some eyebrows, Juul founders say they’re convinced the partnership will help them achieve their goal faster. Juul has always said that their goal is to give adult smokers a healthier alternative to cigarettes and Altria, after all, is the largest cigarette and tobacco company in the world.
Juul’s chief executive Kevin Burns said that their success depends on their ability to get the product into the hands of adult smokers and out of the hands of the youth. He added that they believe this investment and service agreement will help them do that.
Is Juul a Publicly-Traded Company?
Juul is not a publicly-traded company — it’s a privately-held company.
Privately-Held Company Definition: A privately-held company, otherwise known as a “closed corporation” or a “private company,” is a business that either a non-governmental organization or a relatively small number of company members or shareholders own. It doesn’t offer or trade its company stock or shares to the general public on the stock market.
Being a privately-held company, Juul stocks can only be owned, offered, and exchanged or traded privately or over-the-counter. Other terms for companies with similar structures are closely held corporations, unlisted companies, or unquoted companies.
Publicly-traded companies allow investors to own shares of the company through the stock market. This allows individuals to invest in a variety of sectors such as precious metals, real estate, and even cannabis stocks.
Often, company founders, their heirs or families, or a small group of investors are the ones who own privately held companies. At times, employees can also hold shares of private companies.
What Is a Juul Stock Worth?
Juul is a privately-held company that’s now valued at $38 billion after its deal with Altria. While the company is not publicly traded, Juul is part of the world’s best-performing stock mutual fund.
According to a Business Insider report, Fidelity Advisor Growth Opportunities Fund is beating out the rest of its peers last year as it recorded a 27% return in that time. Its largest holding was Juul Labs, which comprised 5.3% of the Fidelity fund. Other holdings of the fund included publicly-traded companies and big names like Facebook, Apple, and Amazon.
Kyle Weaver, the portfolio manager overseeing the fund, cited the significant increase in Juul’s sales, which Altria pegged at $1 billion (up from $200 million in 2017).
The Juul stock, while not publicly-traded, remains a significant player in the country’s economy. Make sure to read up about it before investing in funds that have it as one of its holdings.
Do you have other questions about the Juul stock that we can help you with? Ask us in the comments section below!
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