Juul stock values plummet amid federal crackdown

Investors of e-cig giant Juul are seeing their stock valuations go up in smoke as the Trump administration gears up to ban the company’s best-selling product — mint flavored pods.

Investors in the privately held San Francisco company have reduced their price tag for the stock by more than 25 percent in recent weeks — thanks to a spate of bad news that ended with Trump’s Health and Human Services Secretary on Wednesday saying that the agency was working with the FDA to ban all flavored e-cigs amid a spate of vaping related deaths.

Juul’s mint flavored pods made up 75 percent of total sales as of August, according to proprietary data from Nielsen obtained by The Post.

The ensuing stock drop has been so severe that a 35-percent stake of Juul bought by Philip Morris’s parent company Altria last year is now in danger of being underwater, according to investors familiar with the transactions.

That’s because bidders are reluctant to pay more than $220 a share — well below the $249 a share price Altria paid in a December deal that valued the e-cig seller at $38 billion, sources familiar with the bids said.

“There has been a mismatch between buyers and sellers for months and while there isn’t that much trading currently in Juul, the price has not moved whatsoever,” Tim Sullivan, CEO at brokerage Oceanic Partners, told The Post.

At the beginning of September, sellers had been asking buyers to pay between $360 and $280 a share, according to investors familiar with the deals. Back in June, the stock was selling for between $305 and $235 a share – and the last trade, at $267, took place in August, a person with knowledge of the sales said.

But by Tuesday, a single block of 595,000 shares was put on the market by a seller asking for as low as $261 a share, or $170 million — a price that bidders were wary of hitting, according to another investor familiar with the offer.

Juul declined to comment.

The skidding price follows a barrage of regulatory pressure starting with the Food and Drug Administration’s memo Monday blasting Juul for marketing its nicotine products as a safe alternative to smoking.

Two days later, the Centers for Disease Control warned people to stay away from e-cigarettes, saying it was probing hundreds of vaping-related illness. Six deaths have also been reported from six states, including New York.

Hours later, HHS Secretary Alex Azar dropped the big bomb when he announced plans to ban flavored pods during an Oval Office appearance with the president and first lady Melania Trump.

Altria is unlikely to be the only investor burned by the regulatory threats. In August, Juul raised $785 million in an investment round led by Poseidon Holdings, a tobacco and weed focused venture capital fund, in an investment that valued the company at an undisclosed amount above the December valuation, according to data from research company Pitchbook.

And as The Post reported in May, Capital Reinsurance, a unit of the hedge fund Capital Group, has bought Juul shares on the secondary market for more than $300 a share. The seller of those shares was Fidelity Investments, an early Juul investor, sources told The Post.