22nd Century Group, Inc. (OTCMKTS:XXII) Accelerates the Fall
The drop for 22nd Century Group, Inc. (OTCMKTS:XXII) is accelerating, as the company made an interesting move based on its financial results. But the ticker lost more than 17% on Tuesday, standing at 92 cent, quickly retreating from the recent heights of $1.30. Even when the trend was established, XXII did not attract any professional pumpers, rising only on its own merit as a potentially lucrative cigarette company. 
Potentially only, since XXII is still marking zero revenues, and is burdened by development costs, showing in its filings: 
- $278,000 Cash
- $2.9 million Total assets
- $1.8 million Current liabilities
- $10 million Total liabilities
- Zero revenues
- $2.5 million Net loss
On the positive side, XXII has gathered a momentum of attention, and its price is still close enough to three-year peaks. Trading is more active, and the company holds some longer-term potential, with plans and licenses to distribute its tobacco products.
In the past, XXII has recovered from temporary valleys, and the latest three-day selling is light enough that it would allow new interest to arise. The month of June saw some insider trading, around 200,000 shares shed at around 60 cents, a small amount to the free
float of 17 million shares. Still, daily volumes hardly break through a million shares, and insider holdings may affect the price somewhat.
The potential of XXII recalls that of Vapor Corp. (OTCMKTS:VPCO), a producer and distributor of electronic cigarettes. The main difference is that VPCO has a more lucrative operation, with may worldwide markets. The ticker has been enjoying robust interest without a formal promotional effort, outside the press releases from the company. VPCO is also struggling around the $1 levels.
There is similar tension in the graph of Liberator Medical Holdings, Inc. (OTCMKTS:LBMH), a medical company with a solid record that now grows independently, yet may struggle with the $2 borders.
Whatever the underlying business, penny stocks hold enough risk, so it is best to estimate your preferred time horizon, and the affordability of sharp corrections when XXII breaks the rising trend, as it usually does.
