Vape Holdings, Inc. (OTCMKTS:VAPE) Tries to Recover
We have often talked about the horrendous performance of the stock of Vape Holdings. Inc. (OTCMKTS:VAPE). In early March the rampant hype around the marijuana industry pushed the company to the unbelievable 52-week high of $41.25 per share but on June 20 it reached a low of $1.08, or in other words, in less than four months VAPE wiped more than 97% of its value.
Despite the devastating loss it seems that investors are not ready to give up on the company and for the last six sessions it has reclaimed some of its lost positions. Yesterday VAPE surged by 25%, broke through the $2 mark and closed at $2.08. The traded volume for the day of 688 thousand shares doubled the average for the company and resulted in a dollar value of $1.34 million.
Unfortunately the recent positive movement has not been supported by any major developments around VAPE. The last official PR was issued nearly three weeks ago and it revealed some results from the soft launch of their e-commerce website HiveCeramics.com. Apparently for the month of May the site managed to bring over 300 retail sales which although positive is not exactly an impressive accomplishment. In a previously issued letter to the shareholders VAPE also announced that for the first months of April they have generated around $100 thousand in sales with another $250 thousand lined up.
Judging from these statements the company appears to be moving in the right direction but can the current share prices be sustained? At the end of the period ending March 31 the company had the following financials:
• cash: $598 thousand
• current assets: $768 thousand
• current liabilities: $556 thousand
• quarterly revenues: $30 thousand
• loss from operations: $215 thousand
• current assets: $768 thousand
• current liabilities: $556 thousand
• quarterly revenues: $30 thousand
• loss from operations: $215 thousand
Compared to most of the other pennystocks VAPE is definitely in a better financial state but there are some facts that should be taken into consideration. The company has issued quite a few convertible notes that offer a 40% discount from the lowest closing price of the previous 20 market days prior to the the date of conversion. The possible dilution could once again cause the stock to plunge for the bottom of the chart. Especially when there are another 2.2 million warrants with an exercise price of just $0.114 still outstanding.
Until the next financial report gets filed the volatility of the stock should not be underestimated. VAPE need to show a
significant increase in their revenues in order to offset the dilution of their common stock. Even if you believe in the potential of their ceramic vaporization elements be sure to do your own research before jumping in. 