Vapor Corp. (OTCMKTS:VPCO) Slides Down After $10 million Private Placement
Ever since Vapor Corp. (OTCMKTS:VPCO) announced the completion of the $10 million private placement on Monday their stock has been tumbling downwards. Yesterday they nearly succeeded in reversing the trend by closing higher than the opening price but still, at $0.88 they were 1% lower than the previous close.
Maybe investors were fearful of the dilutive effect of the newly issued 16.6 million shares who were sold quite cheaply for just $0.60 per share. VPCO has been trading at much higher price levels ever since early June. Not to mention that another 3.9 million shares were issued when the outstanding senior convertible notes were converted in full. This brings the total outstanding shares of the company to 80 million, an increase of nearly 33%.
As we have already said in our previous articles VPCO seems to be one of the more stable pennystock companies and that claim became even more true with the filing of the latest financial report. According to it they finished the quarter ending September 30 with the following results:
- $303 thousand cash
- $6.2 million total current assets
- $5.6 million total current liabilities
- $6.4 million revenue
- $280 thousand net income
Through the sale of their e-cigarettes they have managed to not only generate quite respectable revenues but to also become a profitable company. Now with the significant improvement of their cash reserves VPCO will be able to launch its new products planned for the 4th quarter of the year.
But it seems that the management of the company has even bigger plans. As part of the terms of the private placement VPCO is supposed to do a reverse split in the next 60 days. The goal is to reach price per share that is around 150% of the minimum price required by NASDAQ. In 6 months the board of directors should also become compliant with the NASDAQ requirements and ultimately no later than 9 months from now VPCO should uplist to the national exchange.
We cannot speculate whether they will be successful or not, that is why doing your own due diligence should precede any decision you make. A big positive sign is also the lack of any paid pumps in the history of the company.
Yesterday SEC intervened and suspended another pumped company. This time their target was Press Ventures, Inc. (OTCBB:PVEN) who were touted by PennyStocks.com. The newsletter could be easily linked to the now retired Awesome Penny Stocks.
