Vapor Corp. (OTCMKTS:VPCO) Stagnates on Disappointing Financial Results
Vapor Corp. (OTCMKTS:VPCO) is treading water in the past days, being unusually subdued after a serious crash on May 16th. The ticker reveals the general weakness among companies offering e-cigarettes or vaporizers, as the initial hype and promises quickly wore out and investors abandoned the once high-flying positions. VPCO remained almost flat at $4.50 on Tuesday, and opened slightly lower on Wednesday, while other similar selections also deepened the losses.
The lack of enthusiasm about VPCO has settled in despite a rather positive PR message about the new launch of premium liquids for vaporizers. The selling point is that the liquids are made in the USA and at an FDA-registered facility, although currently there are no FDA outlines for the contents of e-liquids.
Unfortunately, all the promises were wrecked by weaker financial results this time around:
- $4.8 million sales for Q1 in 2014, down from $6.8 million for Q1 in 2013
- $3.8 million worth of goods sold
- Gross profit margins down to 21% from 42% for same period in 2013
- Selling expenses up 78% to $2.3 million
So despite the brands and the possibilities, now there is at least some proof that the e-cigarette business is not a foolproof source of gains. Other selections, such as Vapor Group Inc. (OTCMKTS:VPOR) grew just as fast, though with extra support from the potential to be counted as marijuana stocks. For now, VPOR glides around $0.07, down from a peak at $0.40.
Vape Holdings, Inc. (OTCMKTS:VAPE) struggles on to keep some of its positions, though it seems on track to wipe out the high price from before the reverse split. The projections that VAPE would crash below $2 may turn out quote realistic. On Wednesday, VAPE opened lower, pushing down toward $0.28.
Investors’ forums are quite inactive for VPOR, though the mood in several postings states that perhaps the e-cig sector is quite overrated. The verdict for one of the leaders, Victoria Electronic Cigarettes, Corp. (OTCMKTS:ECIG), is that even the recent crash toward $6 is not enough, and the price is not justified. ECIG is getting more volatile, moving down between $7 and $8.
If you still see VPCO and the other selections as a source of gains on a fast recovery, it is better to notice that the e-cig sector had its own bubble conditions even outside the MMJ hype. Plan your investments accordingly to avoid getting caught in the lowered trading volumes. What is even more worrying is that currently the VPCO landing page on the OTC markets does not contain data on shares outstanding or the free float.
Buying VPCO means getting a cat in a bag, with unknown pressures on the stock price.