Vapor Hub International Inc. (OTCMKTS:VHUB) Bombs Even Harder

We warned our readers that VHUB was propelled upwards thanks to the artificial hype created by paid pumpers. Investor-Edge and The Analyst Review were paid $65 thousand on May 15 in order to ensure increased awareness around the stock. Now both pumpers disclose a new compensation of $210 thousand that should be received on June 15 which means that even yesterday’s devastating crash may not put an end to the promotion.

And the likely reason for the prolonged pump campaign might be the millions of extremely cheap shares owned by 33 seed shareholders of the company. Initially they bought 3,34 million shares back in 2010 for just $0.01 each but the 9-for-1 forward split performed this January turned that number into more than 30 million. It should be quite obvious that at the current price levels of the stock these people stand to gain millions.

 
The risks around the company go far beyond the paid pump though. VHUB joined the e-cigarette and vaporizers industry just a couple of months ago through the acquisition of two private companies. This enabled them to start generating revenues but for now the financial results are far from encouraging. For the quarter ending March 31 VHUB reported: 

• $200 thousand cash

• $343 thousand total current assets
• $206 thousand total current liabilities
• $188 thousand revenue
• $3413 net income

The company has limited resources and the current market cap of $31 million is way too big for them to maintain. Even if you believe in the future potential of the industry it is important to take into account all the risks around the stock before committing to any trades. 

Yesterday the stock of mCig Inc. (OTCBB:MCIG) had a rather turbulent session but managed to keep its gains and closed at $0.502. VAPE HOLDINGS INC. (OTCMKTS:VAPE) didn’t have such luck and they continued to slowly approach the $2 dollar mark ending the day 2% in the red at $2.05.