Juul Bois


I am starting to realize that everyone I know is addicted to Juul? I am 30 so talking people age 16-30. Is this a NYC/North East thing or much much more widespread? I’ve always thought $MO purchase of Juul was insane (they overpaid!), but everyone said the same about Instagram and WhatsApp when Facebook bought them, so who knows at the moment, maybe it turns out to be a steal? To me, ~40x LTM Sales for what would seem to be a fairly standard, commoditized product (battery + vape cartridge) is seriously questionable ... is the brand THAT strong? Is Juul going to be “it” for the next 20-30 years and be the modern day “cool Marlboro cowboy” method of nicotine consumption? Is it a fad or is Juul going to be doing 50n in sales in a few years? (Currently estimated ~3.4b in ‘19, up from ~1b in ‘18)

Should investors be changing their views on the stock as less defensive/income focused and more of a growth opportunity? It would seem the stock is very very cheap if Juul turns out to be a home run, even with their legacy business “slowly dying” (in volume terms?) having cornered the market again in addictive consumables. Is MO just chasing trends in their investments vape/marijuana with Juul and Chronos Group ($CRON)? With the trend of many retailers stopping the sale of flavored vapor cartridges like Juul, is less product being sold at wholesale and more direct to consumer/ at higher margins? Is this surface level negative actually a long term positive? With the explosion of interest in ESG and socially responsible investing, what sort of discount should be expect from a shrinking investor base? Is pushback pushback from owning a company that is very successfully getting 16 yr olds addicted worth the upside or are there just better ideas out there?

New York, New York

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