FLASH: NJOY FILES FOR BANKRUPTCY

As I predicted last year – many of the big boys were going to go away in 2016.   Here is the latest example of my grim prediction.   The bright side is many of the smaller vendors and websites will fill the void.
 

Excerpt:  

The company filed for bankruptcy protection on Sept. 16 in Delaware
federal court, burning some high-powered Silicon Valley investors,
including Sean Parker, co-founder of the now-defunct Napster, and PayPal
founder Peter Thiel, who were part of a $70 million capital round that
valued NJOY at $1 billion in 2013. Singer Bruno Mars is also an investor
in NJOY and a fan of the e-cigarettes, which heat nicotine-laced liquid
into vapor.

Parker, who ponied up $10 million to put into the company, said at
the time that electronic cigarettes had the potential to make regular
cigarettes “and all the harm they cause obsolete.”

The filing comes just five months after new federal regulations from
Food and Drug Administration threaten the fast-growing
multibillion-dollar industry that includes tobacco giants Altria and
Reynolds, which own MarkTen and Vuse, respectively.

The Scottsdale, Ariz.-based firm is the first e-cigarette company to
file for bankruptcy, according to Jude Gorman, general counsel at Reorg
Research. “All of the e-cigarette companies are affected by the
regulations, but NJOY has a lot of debt it can’t pay.”

It has an accumulated deficit of $234.4 million, according to the
filing. NJOY also solicited buyers, hiring Barclays in January, but it
had no takers.

Among its biggest downfalls was a product called King, disposable
e-cigarettes that generated a lot of product returns. Gross sales of
King declined to $7.4 million last year from a peak of $93 million in
2013, according to the filing.

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