Vapor Group, Inc. (OTCMKTS:VPOR) Stumbles Down
Vapor Group, Inc. (OTCMKTS:VPOR)’s yesterday session affirmed what we’ve seen time and time again with penny stocks: hype can not bring sustainable growth. After gaining the astonishing 49% the previous day, VPOR closed approximately 9% in the red yesterday at $0.124. A total of 18,670,489 shares changed hands before the last bell rang.
The initial surge in share price was provoked solely by news of the ticker’s symbol change (previously SPLI).With nothing else on the horizon, that was, predictably, not enough to make the company hold on to the gains, as impatient investors seem to have decided prices have risen enough for them to start taking profits. The only question remaining is, will today’s session be a continuation of the decline, or will it be a step forward? There is no way to be certain, but after the merger, the new financials are not too shabby, even though light on reserves:
- $48,000 in Cash
- $940,000 in Current Assets
- $855,000 in Current Liabilities
- $160,000 in Net Income
Despite a balance sheet in the green, there are some alarming circumstances to be accounted for. As it turns out, Mr. Dror Svorai, VPOR‘s CEO, Treasurer and Director, supposedly has committed 3 criminal offences and has 12 tax liens, most of them in the state of Florida, where VPOR‘s headquarters reside. Mr. Dror Svorai has also been in the management of penny stocks Hi Score Corp. (OTCMKTS:HSCO) and Inelco Corp, also known as Onteco Corp (OTCMKTS:ONTC), which are now traded per share for $0.0001 and $0.0003 accordingly.
While with ONTC, Mr. Svorai was, together with the company, a defendant in a legal complaint, that accused him of breach of fiduciary duty and securities fraud. Reasons for the charges were cites as intentionally trying to “entangle… Onteco Corporation in a position susceptible to…debt and fraudulently sold notes convertible to shares at cheap prices to parties” of his choice. There were also claims of of dilution of shareholder ownership – which definitely flashes a red light.
In January the company increased its authorized shares from 500 million to 2 billion prior to the merger. The new limit still stands, even with just 334,381,399 shares outstanding(a/o April 11, 2014), according to the company’s profile. Even disregarding Mr. Svorai’s past, this is still too large a number.
Will it be important in the future? We don’t know. But is it worth keeping in mind? Definitely – as any dilligent person can attest.
