Vapor Corp. (OTCMKTS:VPCO) Crashes on Disappointing Quarterly Report

Vapor Corp. (OTCMKTS:VPCO) ended its recovery in one dramatic day of selling. Just as the ticker looked ready to reclaim some of its old positions, it slid by more than 29% to $3.90, as dollar volumes suddenly expanded to $2.84 million. About 750,000 shares were shed, following a rather optimistic week. Now, the question is whether VPCO would be considered oversold, and inspire a new uploading trend. Investors’ forums see $4 as a possible price level in the short term. VPCO19051.png

VPCO crashed right after the SEC moved in even more aggressively to curtail the perceived MMJ stock bubble. At the end of last trading week, the agency issued an investors’ alert warning of potential risks around pot stocks. The SEC warns of two major risks, the first being the lack of material information about the companies, and the second being aggressive share promotion and potential illegal market activity.MCIG0519.png

We mentioned VPCO several times in relation to marijuana companies who bet on e-cigarettes to achieve clear and easy revenues. VPCO slid down after showing a worse market picture compared to 2013:

  • $4.8 million sales for Q1 in 2014, down from $6.8 million for Q1 in 2013
  • $3.8 million worth of goods sold
  • Gross profit margins down to 21% from 42% for same period in 2013
  • Selling expenses up 78% to $2.3 million

So while VPCO is revving up its engines, the results are disappointing in comparison. This comes at a time when the Marijuana index is also flagging, dragged down by the uncertainties and the constant threat that a ticker could be suspended.

Investors’ forums also show worries that VPCO mainly sells e-cigarette liquids through several online stores, which are basically the same business.

At the same time, VPCO still gives signs that it could uplist to NASDAQ, and in a short while- at the end of July this year. The question remains whether the company could preserve the price levels and fill the requisites for the higher-tier exchange.

The movement of VPCO could be compared to that of marijuana companies, but the pure-play e-cigarette sector is also under fire. Once successful Victory Electronic Cigarettes, Corp. (OTCMKTS:ECIG) is crashing in a way that is frightening to watch. ECIG crashed on solid selling, and from the beginning of may sank from the $10 positions toward $6, with no end of the red trend in sight.

A similar pessimism is affecting mCig, Inc. (OTCBB:MCIG). The ticker for now manages to hold on to the $0.40 levels, but it has become the norm that every few positive days are followed by a correction. In the course of a few months, MCIG is mostly headed downward, burdened by loss of enthusiasm that affects the e-cigarette and marijuana sectors.

If you have hopes for any of the above companies, and especially VPCO, be aware of the possibility for sharp corrections and adjust your investment accordingly.

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