Hedge fund cut a third of Juul Labs’ stake and the value of Juul shrank significantly

It is reported that a hedge fund with a Juul Labs stake has cut the value of its stake by more than a third, reducing the value of the electronic cigarette manufacturer to $24 billion. Darsana Capital Partners recently wrote down the value of its investment in the troubled e-cigarette manufacturer, suggesting that regulatory barriers have increased their impact on its business.

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Darsana is one of the many hedge funds that made huge gains from Juul investment last year after a deal between Juul and Altria. Over the past four weeks, sales of e-cigarettes, including Juul, have slowed due to regulatory scrutiny, a string of negative news and an increasing number of diseases related to e-cigarettes.

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Data show that sales of e-cigarettes increased by 38.1% in the four weeks ending September 21, compared with 48.1% in the past 12 weeks. Sales of Juul Labs products grew by only 31.2%, down from 56.2% in the last 12 weeks.

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Although Altria invested in the controversial electronics company for about $250 a share, its share price rose to a high of about $300 a share this summer, sources said Juul’s valuation is now down 20% and its share price is between $225 and $230. The author believes that the current e-cigarette market is not good, and Juul Labs is facing a dangerous situation this time when hedge funds reduce their stakes.


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