SA国际传媒

Morning Markets:聽Vaping unicorn JUUL is dealing with regulatory pressure, competition, and bad press. The result? Job cuts.

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, a well-funded unicorn in the vaping space, is cutting 650 jobs . The cuts are not a surprise. According to the Journal, the layoffs work out to about a 1/6th reduction in its workforce.

The staffing cuts are not the first we’ve seen from popular unicorns, or high-growth private companies worth $1 billion or more. , though recently public, has undergone several rounds of staffing cuts in the last year. is expected to excise a large percentage of its employee base after its failed IPO. has also cut staff. , not quite a unicorn, has also laid off workers.

The cuts come as the private market turns toward profitability over growth; while the public markets are fomenting at the moment for new stock market records, and that greed has once again overtaken fear, private investors are focused on gearing up their best bets for IPOs, changing the game from its former, Vision Fund-flavored bent.

JUUL is controversial. While its products are useful for helping adult smokers switch to a less dangerous method of nicotine ingestion, they have also proved popular with teenagers, causing fear amongst parents who would prefer their children consume fewer substances. That concern coupled with a vaping scare involving a has sharpened the public sentiment against vaping. JUUL has also been accused of marketing to teenagers, putting it squarely in the middle of the storm.

To combat teenage vaping, JUUL is (under pressure) cutting certain vaping flavors, something bound to ding its profitability.

The Money Behind JUUL

As SA国际传媒 News has reported, JUUL is a company with a time-tested and lucrative business model. Or less politely put, the company’s ability to sell addicting products is as effective as it probably hoped. But its ability to generate gross profit has attracted investors of all sorts:

Juul has raised $14.4 billion in, including debt financing and convertible notes, according to SA国际传媒. The bulk of that funding, however, came from tobacco giant .

Nearly a year ago, Juul announced that Altria paid $12.8 billion for a 35 percent stake in the e-cigarette company. Juul knew that having the maker of Marlboro cigarettes be a large stakeholder in a company meant to help adult smokers quit cigarettes was controversial, and it released a statement saying that. But a $12.8 billion investment was huge, and it propelled Juul’s valuation to some $38 billion, according to .

A lot has happened since the investment and the criticism surrounding Juul has intensified. The company’s CEO stepped down and it that it would stop selling the fruity, creme, and mint flavored pods in the U.S. and only sell tobacco and menthol flavors. It’s unclear what percent of its sales are driven by fruit (e.g. mango), creme and mint flavored pods, but those have shown to be popular among high schoolers.

Amid the drama, Altria wrote down $4.5 billion of its investment, according to .

Juul, founded in 2015, grew astronomically fast. It seems to be unraveling at a similar pace.

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