For a 35% stake that values Juul at $38 billion, a figure some investors like Citi banks Spielman find unjustified
Spielman’s biggest hang-up is the valuation, which raised a few eyebrows when it was announced. He warns that while Altria hasn’t revealed many financial details, he suspects that the move is “destroying value.” While the company justified it as a tech-style multiple, the problem is that “investors own MO for predictability and cash. If they want tech-style growth and risk, surely they’d want to pick their own stock?” he asks.
It isn’t just the price paid that has him worried. Smoking has fallen to near-record lows in the U.S., while the Food and Drug Administration has called vaping an “epidemic” among teenagers, so it isn’t surprising that tobacco companies are bracing for a future without traditional cigarettes.