Vape Holdings, Inc. (OTCMKTS:VAPE) Threatens to Slide Below $2

In the past few days, the e-cigarette sector seems to be going up in smoke. The latest sliding ticker is Vape Holdings, Inc. (OTCMKTS:VAPE), the high-priced wonder that now cannot find a price to bottom out. VAPE shed another 9% on Monday to $2.43, as it extends the latest trend in the red. Dollar volumes were above $777,000, remaining rather subdued in the past month. VAPE0520.png

The latest PR from the company outlined the latest financial results, but since May 14th, the price slide showed that investors remained unimpressed. VAPE will try to make way in the e-cig industry with the following financials:VPCO0520.png

  • $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

Those strange data mean that VAPE hardly marked activity in the last reported quarter. So it is not unusual that the stock price slid from its post-split peak near the phenomenal $50. VAPE was just seen as a lesser quality company, and the general deflation in the marijuana sector took its toll.

Investors’ forums show the belief that VAPE is considered a pressured-down ticker, due to the influence of short-sellers, and the fair price would be $10. Others believe the slide is unnatural and due to critical articles from the Seeking Alpha analysts. But in any case, VAPE holds enough red flags to justify the fall after the extremely enthusiastic rise a few months back.

As the marijuana sector grew in influence among investors, VAPE benefited by being placed among companies that tried to re-purpose electronic cigarettes for cannabis consumption. While VAPE had no plans like that, the similarity helped. Unfortunately, other names are failing right now. Vapor Corp. (OTCMKTS:VPCO) crashed down on unusual selling, on a day when the SEC issued an investors’ alert. Now, VPCO has regained some strength, being bought up toward $4.39.

There is also some optimism surrounding mCig, Inc. (OTCBB:MCIG), though the recovery is still slim and vulnerable. MCIG added a bit toward $0.43, as Tuesday opened with small gains.

The e-cig sector was quite hot even before the rise in MMJ stocks. Unfortunately, some of the leading names like Victoria Electronic Cigarettes, Corp. (OTCMKTS:ECIG) also took a beating, sliding from a peak price near $20 to $6. Still, ECIG managed to reverse the loss in one day of thick buying, reaching $8 on Monday.

While there are warnings that VAPE could easily sink below $2, others see the slide as an opportunity to load up on the rather scarce 8.6 million post-split shares. If you are one of those investors, be aware that VAPE may continue downward for a while, before finding any support to the drop. We can’t predict how long the short sellers would act, but it is wise not to rely too much on a reversal.

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