Vapor Corp., (OTCMKTS:VPCO) Keeping Level
Electronic cigarettes – it’s a good idea. Smokers get their nicotine hunger satisfied and non-smokers don’t have to inhale the nasty second-hand fumes. There’s no ash, no flames, no smell, and manufacturers even claim that all the cancerogenic substances are gone. It sounds a bit like “chocolate that doesn’t make you fat” but they do exist and Vapor Corp., (OTCMKTS:VPCO) is a part of this, apparently quite lucrative market.
They seem to be trudging along nicely, as well. We read through quite a lot of reviews on VPCO‘s products done throughout specialized websites all over the Internet and we can see that the experts seem to be generally impressed with the quality and feel of the e-cigs. That said, while looking for opinions on the products, we found some on the company itself and a considerable part of them are not particularly pleasant. Users have posted complaints on ScamBook.com and RipoffReport.com about unauthorized credit card charges and poor customer service and, for a person researching the company for the first time, this might raise some question marks around their credibility. Then again, we do understand that the complaints and reports might have been posted by people who simply failed to check out the Terms of Use.
Regardless, VPCO‘s stock seems to be performing rather well. On Thursday it jumped by about 25% which brought the ticker back above the $1 per share mark and while Friday ended with a 4% loss, it was pretty much cured yesterday when the ticker closed the day at $1.17. This means that the market value of VPCO currently stands at around $70 million and while it might be a bit of a stretch (total assets amount to just $4.6 million) it’s certainly not as absurd as the ones showcased by other penny stocks. Especially considering the fact that VPCO are displaying respectable progress. We can see that the working capital (something altogether missing from the balance sheets of other small cap ventures) has increased year-over-year and the same goes for the revenues. The highlight of VPCO‘s latest 10-Q, however, is the net income. It might be a rare sight in Pennyland, but they have managed to achieve it. The first quarter of 2013 was profitable.
The margin isn’t brilliant – the net income amounts to just $193 thousand out of $6.3 million in sales for the whole period but it certainly shows signs of progress. We can’t be 100% certain, but we’re pretty sure that this is what got traders interested in VPCO and as soon as the report came out the volumes started rising and the ticker began to climb up. Before the 10-Q, the price was hovering around $0.45 with few corrections up or down, but just four trading sessions after it was published it was already at $0.74. After some hesitation, it returned back to around $0.60 at the start of June and then some entities like RedChip Companies and NBT Equities Research (whose review on Petrosonic Energy Inc (OTCMKTS:PSON) ended in disaster) started talking about VPCO. There were several interesting interviews with the company CEO, Mr. Kevin Frija and that’s when things really took off.
The increased awareness pushed the ticker above the $1 per share mark all the way to $1.44 but then, for some reason, VPCO experienced quite a drop and within a matter of days the ticker was back at $0.95. Shareholders weren’t ecstatic and we’re quite sure that they never want to see such a thing again. Unfortunately, at this point, at least, we can’t say that it’s impossible.
As we mentioned in one of our previous articles, according to the latest report there are quite a lot of notes outstanding that are convertible into common stock at some pretty tasty discounts. If the note holders decide to get the shares and let them loose on the open market, the price will inevitably be depressed. Another problem is the uncertainty around the whole industry. It does seem strong at the moment, but we read some news about scientists urging for further research into the health effects of e-cigarettes.
If some problems do occur, they will definitely have an effect on the price as well and VPCO‘s chart could start to resemble the ones of MOJO Organics Inc (OTCMKTS:MOJO) (who lost around 44% in a single session yesterday) and iTalk Inc (OTCBB:TALK) (who wiped out 30% on July 1). If that happens, it will really be a shame since VPCO do show signs of potential and the progress displayed in the reports suggests that they have the advantage of a strong management team. Let’s hope for fair winds.
