I believe JUUL is a morally bankrupt company in an evil industry.
But … smoking is an $800 billion global industry.
Could the #1 disruptor in an $800b industry be worth 5% of that? Yes. Of course it could.
And the #1 player in a very large, rapidly growing market always commands a premium. Especially from a slowly failing (but still huge) incumbent leader.
If JUUL grew 600%+ last year and has 29% market share, AND that growth and market share both continue, then you can certainly justify that price vs. the $800 billion market itself.
Also, as horrible as this is, JUUL appears to have increased smoking in teenagers, and thus increased the market size for smoking beyond $800 billion, thus (sadly) adding substantial value to an enormous but troubled market:
This is very sad. But from a go-forward business model perspective, it is extremely “promising”.
If revenue growth or market share growth stall, then it is wildly overpriced.
But in an almost $1 trillion market in huge transition, you gotta take some risk. Or become obsolete.
Still, JUUL is an unethical company and product, and it is all deeply troubling.