Electronic Cigarettes Intl Group Ltd. (OTCMKTS:ECIG) Spikes On News
Electronic Cigarettes Intl Group Ltd. (OTCMKTS:ECIG) finally halted its descent on Friday, after issuing a pretty optimistic press release.
In said PR, ECIG boasted that it has expanded the FIN Advanced Vaping System (AVS) product line in response to strong customer demand across the U.S., and it has added 10 new refills in various flavors and strengths. That is certainly good news, and if it is really accurate, it may mean that ECIG has taken yet another step forward on the road to commercial success.
Still, any investor wishing to commit to ECIG stock should remember that said road is probably going to be a long and hard one. Although it is true that the company’s latest financial report, for Q2 2015, looked better than the one that preceded it, it still left quite a few things to be desired:
- Cash – $1.9 million
- Current Assets – $14.6 million
- Current Liabilities – $26 million
- Sales – $12 million
- Loss from operations – $7.6 million
If the company manages to generate enough revenues from these new retail locations, it may be able to break even or even turn profitable. However, it doesn’t seem possible that anything of the sort will happen in the next quarter or two.
Meanwhile, the company’s current situation looks a lot bleaker for investors. About a week ago, an 8-K was filed, announcing that just a couple of days ago, warrants for the issuance of 5.9 million for the shares were issued, and the price of those shares is fixed at $0.2087.
Which means that presently, the warrant holders can make a hefty 25% profit on each share they are issued and dump on the market – and their profits will only increase as long as the ticker is going up.
It should be obvious to investors why this is a perilous state of affairs. In light of this, both opportunistic traders and dedicated supporters alike should be extra careful and vigilant when dealing with ECIG stock.
