Vapor Group Inc (OTCMKTS:VPOR) Gets Dumped To The Ground
In the aftermath of yesterday’s session it should be obvious that investors are far from impressed with Vapor Group Inc. (OTCMKTS:VPOR) despite the company’s efforts. Admittedly, if you are a long-term shareholder you have been through some rather horrific times as the stock managed to wipe 99% of its value crashing down from its all-time high of over 40 cents posted last March.
Recently another huge issue has been plaguing investors who own shares of the company – the truly devastating dilution of the common stock. At the end of 2014 VPOR had accumulated around $3.4 million in convertible notes payable and accrued interest. For the first three months of 2015 the owners of approximately $1.7 million worth of convertible notes decided to turn them into common shares. As a result the outstanding shares of the company grew from less than 930 million to more than 2.65 BILLION. As we said in our previous article the company did try to limit the amount of shares that could be issued and used $250 thousand to prepay two convertible notes before they reached maturity.
Recently the company also announced that the earliest date a reverse split could be authorized is going to be in January 2016. Furthermore, in a PR published yesterday, both the CEO and the COO of the company announced that they won’t be converting any of their preferred B shares until after January 2016. As we said despite their efforts the market has remained unimpressed. During yesterday’s trading the unprecedented amount of nearly 580 million shares got traded. The massive selling caused the stock to slid down below a penny to a low of the day of $0.0009 and although by the time of the closing bell VPOR were sitting at $0.001 they still suffered a loss of over 28%.
Trading VPOR’s stock is extremely risky. At the end of March the company still had over $1.4 million in outstanding convertible debt and accrued interest. Even if they manage to repay some of the remaining notes the likelihood that the majority will be converted into common shares is extremely high. Especially when you take into account the fact that VPOR had to increase their authorized shares several times with the current amount being 4.5 billion shares. The quarterly report that should be submitted by May 15 will reveal the current share structure of the company.
