Vape Holdings, Inc. (OTCMKTS:VAPE) Crashes Along with Other Vaporizer Companies

This week did not treat e-cigarette stocks gently, no matter whether they belonged to mainstream producers of nicotine vaporizers, or were seen as a part of the pot stock boom. The most dramatic case is Vape Holdings, Inc. (OTCMKTS:VAPE), which took great pains to rename itself and perform a reverse split. Unfortunately, now VAPE is down to a faction of the post-split price, sinking even below $2. VAPE0523.png

As the week runs toward the end, VAPE shed another 9.8% to stand at $1.84, though volumes were at the habitual levels, a bit above $732,000. Only recently, VAPE gave some hopes it could recover the $4 positions, or even hold above $3, but the gains in the past month start looking more and more like a dead cat bounce, beginning to raise doubts that VAPE may be headed for even more dramatic cuts, and a much more modest price range. MCIG0523.png

VAPE now holds a weight of 0.42% in the Marijuana index, and moved along with the general drop in the average price of pot stocks. The index shrank another 7% on Thursday, though this time, most of the companies ended the day in the red. To add to the pessimism, a Seeking Alpha article pulled no punches, and instead of picking separate tickers, spoke of the whole MMJ sector, comparing it to an abbreviated version of the dot-com bubble.

The main criticism against MMJ companies, with few exceptions, remains the same. Most of them don’t post updated financials, or if they do, there is no proof that their marijuana plans are producing any earnings. Seeking Alpha lists VAPE among the much less reliable cannabis stocks, with the reminder that until recently, the company bet on the boom of social media to make its business work under the name of People String Corp. and the ticker PLPE. Now, the only bet VAPE is making is to sell specialty ceramics aimed at cannabis use.

Left to its own devices, VAPE is not really impressive in its financials:

  • $14,000 cash as of December 2012
  • No revenues
  • $32,000 total current liabilities
  • Zero net income, zero expenses in the quarter to September 30th 2013

And there is still no proof that the sales of HIVE ceramics would lead to a rapid improvement, especially in a sector where vaporizers are ubiquitous.

For now, mCig, Inc. (OTCBB:MCIG) remains a more stable alternative, as the ticker manages to hang on a bit above $0.42. MCIG focuses on repurposed electronic cigarettes offered for the cannabis market, and so its stock price resembles the curve of the Marijuana index, with a spike back in March, followed by a 50% downward slide since then.

Vapor Corp. (OTCMKTS:VPCO) is in an even more dramatic downward spiral. VPCO has been in the red for a few days, and for now it stopped at $4, after a wild day of selling. VPCO may have been affected by the SEC warning about marijuana companies that echoed the same concerns of low reporting standards and uncertain business practices.

If you find any of those tickers worthy of investing, and see a potential for a rebounce, keep in mind that the bad mood may return at any moment, and plan your investments accordingly.

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