VAPE HOLDINGS INC (OTCMKTS:VAPE) Stuck In a Rut

We last wrote about VAPE HOLDINGS INC (OTCMKTS:VAPE) when it bounced 30% after enduring a fourteen-session long descent. Today, six sessions after the impressive surge, VAPE seems stuck. Despite registering trades and closing in the green, the stock has barely moved. For three consecutive sessions it ended the trading day at $1.27, and on the fourth – at $1.28. Yesterday, VAPE added 0.78% on a volume of 153.3 thousand, and closed at $1.29.

Yet, despite the stock’s failure to register a percentage change higher than 1%, these seven green sessions brought the company a 55% price increase, which didn’t remain unnoticed by VAPE supporters. When we looked through the posts on investor forums, we found one enthusiast, who wrote: “VAPE $40.00+ soooooooooooooooon”. Let’s elaborate on that.
When you look at the big picture VAPE reaching “$40+” seems highly improbable. VAPE hasn’t managed to close above $40 so far, not even when the marijuana frenzy was at its peak at the beginning of the year. The stock’s only brush with $40 was when it hit its 52-week high of $41.25 on March 05, but in the end closed at $34.31.

So, is the dream of “$40+” substantiated, or is it just that – a dream?

To find the answer we decided to look through VAPE‘s latest report first. It was a 10-Q filed on Aug 19, and it covered the three months ended June 30. Aside from the fact that the company reported its “first revenue-generating fiscal quarter”, it still ended the quarter with an $1.3 million loss. The financial numbers are far less than impressive, as quarter over quarter the numbers have worsened, and the issuances have grown. Just for Q3, 296 thousand shares were printed at $0.678 each.

There are no recent press releases, as the last one is from Sept 16. It disclosed that the company plans to launch a new product from its HIVE Ceramics line, which is expected to hit the market “on or before December 1, 2014”. But it seems highly unlikely that this news has triggered the current green closes, as it is very outdated.

After browsing the web, we came across a couple of more recent articles – one from Oct 19 and the other from Oct 15. The first one mentions VAPE by name, but it is doubtful that it is the culprit for the recent price growth, as it doesn’t disclose positive news. VAPE is mentioned as one of the companies, which will be “under scrutiny” by the Securities Exchange Commission, and that’s hardly news to celebrate.

The second article stated Barack Obama’s intention to choose Vanita Gupta as his nominee for the position of US Assistant Attorney General for the civil rights division of the Department of Justice. Ms. Gupta is “a strong supporter of marijuana decriminalization and outright legalization by states”. That is why pot stock enthusiasts are convinced that her appointment for the position “will be simply game changing”. However, this news is also quite outdated.

Now to answer the question whether VAPE reaching “$40.00+ soooooooooooooooon” is merely a dream. The answer is “yes”. When you look at all the facts surrounding the company, it becomes evident that VAPE closing that high will take nothing short of a miracle. Always do your due diligence before deciding whether or not to invest in a stock.