Home Finance & Fintech Dow Down 500 Points After Powell Comments

Dow Down 500 Points After Powell Comments

by delta
0 comment

New York hedge fund Mudrick Capital Management has won big in its nearly six-year investment in e-cigarette company NJOY Holdings.

Marlboro maker Altria Group on Monday agreed to buy NJOY, one of the few e-cigarette companies whose products have federal regulatory approval, for at least $2.75 billion. Assuming the deal goes through, Mudrick’s NJOY shares have paid out about $75 million over the years and are worth about $1.33 billion, according to people familiar with the company, with an estimated profit of $1.26 billion. Investors managed about $3.4 billion at the end of the year.

The investment has an average internal rate of return (before fees) of over 100%, said a person familiar with the matter. In contrast, another lucrative deal hedge funds have been waiting for, Hollywood studio MGM Holdings, which reached a deal to sell to Amazon.com for $8.5 billion, including debt, in 2021. The deal earned MGM’s largest company about $2 billion. Shareholder, Anchorage Capital Group. Given that the investment was made over a decade ago, his IRR for that deal in Anchorage at the time was about 16% after deducting fees.

Mudrick helped hire NJOY’s management team, has a majority on its board and has provided growth capital for years, said people familiar with the company. Mudrick founder Jason Mudrick will also chair the board in 2022 and oversee the sale process.

The deal includes an additional $500 million if the Food and Drug Administration approves additional NJOY products.

Mudrick purchased a 51% controlling stake for $20 million shortly after NJOY went bankrupt in early 2017. Mudrick has added and sold part of his stake over the years, believing that increasing the distribution of the product under new management could turn NJOY upside down for him. and with more money. Longer term, Madrick believed NJOY could gain limited regulatory approval for its e-cigarette products.

Early on, some investors lamented that they were missing out on Juul Labs’ dominance at the time. Industry competitiveness was later overturned. Altria spent about $13 billion on his Juul stake in 2018, only to see that valuation evaporate.

You may also like

Leave a Comment


Delta-Compliance.com is a premier news website that provides in-depth coverage of the latest developments in finance, startups, compliance, business, science, and job markets.

Editors' Picks

Latest Posts

This Website is operated by the Company DELTA Data Protection & Compliance, Inc., located in Lewes, DE 19958, Delaware, USA.
All feedback, comments, notices of copyright infringement claims or requests for technical support, and other communications relating to this website should be directed to: info@delta-compliance.com. The imprint also applies to the social media profiles of DELTA Data Protection & Compliance.

Copyright ©️ 2023  Delta Compliance. All Rights Reserved

Newsletter Signup

Subscribe to our weekly newsletter below and never miss the latest product or an exclusive offer.