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1. H-M, may the value of the ring soar far beyond any value that VHUB has had for you!
2. Regarding the behavior of VHUB's management, I really don't know a lot about the management of other penny stock companies, but Kyle and family/friends seem to have tried their very best against all the usual odds that face a family-run company. Most significantly, they didn't sell while the 2014 pump and dump was going on; in fact, they were so victimized by it that I wonder what the back-story might have been (the usual suspects would be the DogInn ownership).
3. There actually is something to be said for your innovative idea that part of the termination dividend be phrased via product distribution to shareholders. ...and I've never had and never will have any form of real cigarettes, e-cigs, or vaping products (which doesn't make me superior to anybody, just means that I don't do "try it, you'll like it"). The challenge will be how to give a multi-dollar item on a per-share basis. People also will have fun down the road doing their 1040 Schedule D's. The IRS may not accept part of a mod in payment of taxes.
4. Depending upon whether one views information about a company as being a right or a privilege, one will judge whether Kyle has been sufficiently forthcoming in providing information. I think that it was bad form for him not to release second quarter sales when he had the number on his keyboard. My general belief is that in the absence of information, shareholders and potential shareholders will presume the worst case, so there is something to be gained and nothing to be lost by leaning towards the side of transparency.
Have a great week!
First, my apologies to White Lightning for not getting back earlier to his post. I take off for the Jewish Sabbath, and as while I am very committed to this board as you (dc key) have been kind enough to mention, it takes a back seat for 25 hours weekly. FWIW, the only time in my nearly three years here that I've wondered why I'm here was when I was pointing out that VHUB could force Gotama to convert their loan into shares at a contractual 15 cent price, and I was piled on for even imagining that any lender could have been that dumb for letting the conversion option be the debtor's rather than the creditor's. Why the Gotama matter is important at this time is that if the PLY transaction needs to go to a shareholders'' vote, and Gotama still has their something like 400,000 shares, it would be interesting to see (though we'll never know) how they're voting.
Second, your response is better than anything I might be able to cobble together. The last time I was personally involved in investing was back in the 1980's, and that was on a very small scale. I'm active on this board because this an enjoyable place for me to be in retirement and I've been fascinated by VHUB ever since I was getting boiler-room calls and e-mails about the company during Spring 2014 and was curious how long it would take for the stock to tank. In the end, Kyle and friends won my respect, as in my own long, now ended for four years, career the least inclination of mine would have been to become entrepreneurial.
Third, if the transaction is, as was advertised on December 30, an asset acquisition, there will be, I believe, either a "termination dividend" from VHUB representing the cash that's left after paying liabilities, followed by a formal liquidation of the company (or maybe the re-use of the shell to fashion a reverse merger for PLY so that they can escape their LLC status and go public) or there'll just be a pure liquidation and distribution of cash to shareholders. In the second scenario, the reverse merger possibility drops out of the picture.
Fourth, it may be the case that the real value-added of PLY's takeover of VHUB is that the concentration of sales will become foreign-centered more quickly, thus mooting the issues with FDA - though I think that President Trump's deregulation posture means only good things for the vaping industry.
So, I hope that there is sufficient quality in the post that my delay in response will be excused. I believe that the new week is going to be an interesting one, i.e. a good one for the shareholder community here. The one thing that makes me a little nervous is why PLY hasn't been snapping up all the shares that it can, even to the point of needing to file an 8K for crossing the 5% line of demarcation.
All comments are welcomed - don't confuse my writing reasonably well, albeit on the excessive side, with having all (some? any?) of the right answers. Something, not yet published on this board, must be a valid explanation for how the market-makers and PLY have acted since December 30, as I can't come up with any reason why VHUB, based on sales and earnings history even without regard to PLY's intentions, shouldn't be selling for over five cents already (i.e. valuing the company as a whole at say $5 million, given 90 million issued and outstanding shares.
White Lightning, I believe that while the deal will be announced on or around February 15, the execution of that deal will require a couple of months to effectuate, because there likely will need to be formal notification to VHUB shareholders of a stockholders meeting, plus proxies in favor of the transaction to be secured. So I don't think there'll be a symbol-change for some time.
At face value of the 8K, there won't be a symbol at all shortly after the transaction has been done, because PLY is an LLC and can't be publicly traded. After the asset acquisition, VHUB itself will be nothing but a load of cash, slightly reduced from the proceeds of the asset acquisition as some liabilities, like tax withholdings, will need to be paid off. That load of cash would be distributed to VHUB shareholders, and that would mark the end of VHUB.
However, we've been debating on this board for a few weeks, off and on, whether PLY will somehow go public using the remaining "shell" of VHUB once PLY has acquired VHUB's assets.
I may be wrong on lots of the stuff I've written above, as I'm much more of a theoretician on corporate finance than a practitioner. My career path was CFO of a nonprofit organization. Hopefully, others on this board will chime in with their views and expectations.
Good Friday afternoon, Hostastock,
I'm not aware - and I'm not sure if anyone could be aware other than Fife and the transfer agent - that any, some, or all of Fife's 8 million shares have been sold. I would have imagined that some would have been sold when VHUB was running a high transaction volume some weeks back, but to the best of my always limited knowledge, there's no new 8K sitting out there.
The interesting part about Fife holding shares would be that his shares (and only just a few million more) would be needed to push past the 50% of outstanding shares needed, along with the Winther and Perlingos shares, to approve the PLY transaction without involving the minor shareholders (no insult intended to anyone on this board). I would guess that there will be a shareholders meeting, with votes gathered in advance of course, to approve the transaction.
I'd like to know if it is a matter of your intuition, which I respect, or a matter of your having gathered the facts, which I'd similarly appreciate, that has brought you to the belief that Fife is as out of the picture for stock holdings as he is for being a lender.
Thanks, dc key, and in the end mostly what I was doing in my post was to agree with your post #7216.
Still, I keep on getting this nagging feeling that there's something we're all missing - something that would explain the behavior of the market-makers in the stock as regards putting up walls, something that would make sense of why PLY hasn't purchased every share it could get its hands on (even if after getting to the 5% ownership threshold it would need to file its own 8K) when that would save money compared to purchasing assets, and something that would tell us what Fife/TCA has been up to with their 8 million shares owned (at some point in time, if not presently).
In the end, as long as Kyle's interests are reasonably aligned with the interests of the shareholders in general (other than the management group is negotiating their employment/termination/non-compete contracts), you'll do well.
Hi Knife, we're all entitled to our guesses and to our hopes, so I'll offer you my bunch of guesses:
1. I think there'll be a slight delay from the February 15 timeframe that was imbedded in the 10K, as legalities always take longer than expected.
2. Given that the initial 8K regarding the PLY negotiations was issued after the market-close on a Friday afternoon, I'm guessing we'll see the announcement a week from today, February 17, after the market has closed.
3. I will guess that there will be a "dual-purpose" 8K covering both the details of the transaction with PLY and the earnings for the second fiscal quarter.
4. It is highly likely that the earnings report will be mostly irrelevant, given the transaction with PLY. I'll predict a slightly less than breakeven quarter, as VHUB already has stated that the second fiscal quarter is the seasonal low point, coupled with heavy legal expenses hitting the books due to the PLY transaction and also due to the litigation in which VHUB is the plaintiff. Again, I think that the earnings report will become irrelevant in the larger picture of the transaction.
5. We all read in the December 30 8K that the transaction is expected to be phrased as the acquisition of VHUB's assets. Yet, I do agree with some opinions in this board that in the end PLY will wind up converting from an LLC to a publicly held company, utilizing the corporate form of VHUB to get that accomplished. I'm not that bright to figure out how to walk to a reverse merger (in effect) from an asset acquisition, but fortunately I'm not running this show.
6. VHUB stock will keep on trading for between a few weeks to a few months after the upcoming 8K has been released as it takes time to get things done, and the stock will sell at a discount to what the deal will be worth to VHUB shareholders. Some folks on this board will reap the resultant arbitrage profits, while others will take the money and run, not wanting to risk the deal collapsing.
7. Overall, I just can't picture why Kyle and friends would take anything less than seven cents per share for VHUB stock, but then again I can't picture why the stock is currently trading as low as it has been...just based on the sales and earnings history, even without regard to the transaction with PLY.
8. As I had mentioned awhile ago, I think that the litigation in which VHUB is the plaintiff will be settled "on the courthouse steps" next week, as VHUB's folks don't have the time to mess with this and the defendant company will just threaten bankruptcy if VHUB prevails in litigation.
Again, everything in this post is pure guess on my part, perhaps with some pieces being more intelligent guesses than others, and I wish everyone well here.
Hi dc key,
Two quick items:
1. I would respectfully disagree that VHUB will be out of the trading picture on February 15, even if the deal will be announced at that time. There will be "arbitrage profits" to be made in the stock as the discount between the market price and the buyout price will narrow until the deal becomes final, presuming nothing goes off the tracks.
2. Not that I'm anything resembling a board monitor, it's really easy to click on your screen name attached to any post of yours, then click on your total number of posts, and anyone can see where you are devoting your time and your money. So it really doesn't matter if you are granted permission or not to present the merits of your other investment interest on this board.
Have a good day, Sir.
Thanks, Knife, as ever. I think your point about the congruence of interests of the major stockholding group with that of the remaining shareholders can't be emphasized enough.
Meanwhile, one overlooked aspect at this time of our all concentrating on the upcoming transaction is how deeply the stock appears to be undervalued currently without consideration of an upcoming transaction, based particularly on sales growth and the first quarter bottom line, even before one might consider how much more a transaction would bring to the share price. it would appear to me, the way things seem to be going, that the company would actually be likely to be able to pay for a large measure of the costs of FDA compliance, even if assuming no pullback on the regulations, through earnings-generated funds.
Best wishes!
Good morning, Knife, always a joy to relate with you! Strangely enough, the most intriguing individual word of that fateful third paragraph is the word "intend." Lawyers are so much better in not expressing certainty - nothing is less certain than an intention - than all of us posters here are in expressing what we take to be certain, and yet probably isn't anywhere near certain. Of course, it's the uncertainties that create market inefficiencies, otherwise known as opportunities.
I think (see my immediately prior post) that the most likely resolutions of the uncertainties are leaning in the direction of VHUB's stock selling three or so weeks from now for a lot more than where it is the most recent time I looked this morning. But I have a lot of respect for the opposite point of view.
I hope you will do well here.
Good morning, decatsmeow, and it's unfortunate that you've exhausted your posting limit for the day. I really didn't imagine that there'd be such a load of posts between my middle of the night foray into here and this moment, right after I've caught up with everything in between. Thanks for calmly and rationally presenting your point of view.
I think what's really going on here in the past whatever number of hours is the debate whether Kyle and friends are entering into this transaction (in whatever way the "asset acquisition" by PLY will finally be specified) from a position of strength or of weakness. I honestly don't know, but I'll line up some evidence on either side of the debate.
Why management is dealing from a position of strength:
1. a nicely profitable first fiscal quarter in which lots of debt was pared down.
2. the attraction of the Limitless product name.
3. experienced management, showing signs of leadership in the industry.
4. prospect of reduced regulations due to the new presidential administration.
Why management is dealing from a position of weakness:
1. The second fiscal quarter was "advertised" by the company in the 10K as being the low point seasonally during the year.
2. The significant minority position by TCA/Fife may be pulling some chains on management.
3. The stock price hasn't done anything from a longer term perspective. Sure, going from .3 cents a share to 2 cents over recent months is a big climb, but then going from around $1.90 per share at the intraday peak in Spring 2014 to 2 cents or so today is even a bigger decline.
4. The FDA regulations, and the upcoming costs of compliance, are in place until the uncertain moment if/when they'll not be in place.
There are lots more points that could be offered as matters of strength or of weakness in regard to how hard Kyle and family can negotiate on their behalf and on the behalf or the rest of the shareholder community. Overall, if you think Kyle is negotiating from strength, you couldn't begin to imagine why he'd take less than (pick a number) 7 cents per share as the value of the assets they're selling. Or, if you think Kyle is negotiating from weakness, you'd easily picture that he'd take the current price of the stock and be grateful, and be happy to have a job post-transaction.
It sure would have been helpful for the company to have released its first quarter sales number when it became available, and that's another element that bolsters the annoyance of some of the gang here who have been really unhappy with the "openness" of the company for a long time.
Anyway, thanks for interacting with me. We'll all have a better sense of "which end is up" right around three weeks from now, and patience is always a real challenge.
Good middle of the night, 2434Nate,
The simple answer to your question is no, namely that all shareholders are treated alike, and you can stop here if you'd like.
The more complex answer would have these components:
1. If the buyout were to be effected via shares of stock in a new company, some people who would otherwise get fractional shares would get cash for a piece of their holdings.
2. What's going on with VHUB is phrased in the 8K as a purchase of company assets. This would leave VHUB with a pile of cash at the end, and just about nothing else after paying whatever bills there are, and the expectation is that the pile of cash would be distributed on a pro rata basis to shareholders.
3. There's been speculation in this thread that in the end there will be a "reverse buyout" in which PLY will be taken public (it's currently a limited liability company, or LLC) via absorbing itself into VHUB, and this gets sufficiently complicated that I don't feel really qualified to go down this road before I go back to sleep. The irony is that the reverse buyout stratagem is how VHUB got started, as the VHUB people found their way into the shell of Dog Inn.
4. There's also been speculation in this thread that, given per the 8K that there's some sort of consulting relationship between executive management of VHUB and PLY, it's already happening that VHUB executives are getting preferential treatment over ordinary shareholders. However, in regard to what happens with VHUB shares themselves, it's not as likely that the major shareholders would be treated better than the ordinary folks.
Hope this helps, though I'm sure that I've oversimplified in part and probably omitted a lot - but you'll learn that this is a really well-functioning thread, and folks will chime in to improve upon what I've written here.
Good morning, makinezmoney, and I wonder which of two possible meanings you had in mind with your suggestion. To cancel any outstanding shares, VHUB would need to buy them up, and I think that the company's concentration as regards cash right now is to manage itself so that it won't take on any more debt, i.e. have enough money to just pay its bills on time.
However, the company want to cancel some of its Authorized (but not issued) shares, as the big leap in authorized shares was legally required when the company started to be financed via toxic debt - don't get me wrong here, PLY has the contingent right to convert its debt at 85% of the average price of the stock over some period of days, so authorized but not issued shares are still required to be out there.
Meanwhile, the piece of the puzzle that is still eluding me is why PLY isn't buying up shares to just under the SEC 5% reporting threshold (or perhaps they are, but I would imagine that their involvement would have driven the VHUB share price higher). Even in the potential reverse merger environment, getting into the old stock cheap is beneficial.
dc key, thanks for coming back and mentioning that you were the initiator here of the reverse merger prediction on this board. So you were the guy I was apologizing to last night when I was lamenting my lack of attribution because I was too tired/lazy to sort through a flock of posts.
Now here's where it gets to be fun. Let's presume you are correct, and it turns out to actually be a reverse merger, and Kyle and friends will still be involved with the "new" PLY/VHUB as per the indications in the December 30 8K and all the photos on the various websites of Kyle's involvement with PLY. While it surely appears that the Dog Inn people were behind the 2014 pump and dump on VHUB stuck (which in the end did enormous damage to the value of Kyle's and friends' holdings), I'm either too innocent or too dumb or (least likely) actually correct in my current belief that it is unlikely that the Winthers and Perlingos will be bad-actors as regards influencing the stock price of the "new" company through nefarious means (because they have more to gain by seeing the stock of the "new" company increase in price "organically" rather than artificially/temporarily).
In the end, I keep on returning to the idea that it took a lot for Kyle and kin to go down this road with PLY, and "a lot" infers a share price a lot higher than where VHUB is right now. But I certainly can understand the point of view of the skeptics.
Good day, Sir!
Decatsmeow, first, I'm flattered that you consumed your posting limit for today by responding to me.
Second, in regard to the "news blackout," I do believe that this is actually a case where it wouldn't be prudent for the company to give a play-by-play description as to what's going on as the march towards February 15 continues. There is just too great a chance to get tripped up on reporting elements of speculation rather than fact - speculation gets you into trouble right away, and facts change, which gets you into trouble eventually. Just my opinion here, but where I do agree solidly with you as to releasing information, I can't imagine a valid excuse not to have reported second fiscal quarter sales by now.
As regards your assertion about there having been lots of dumping, wiser folks than I can figure out whether it was a matter of the seller dumping or the buyer accumulating. It is well within the realm of possibility that you are one of the countless folks wiser than I am, especially on the topic of investing as my interest is purely socio-academic.
Have a good day, and as there is nothing in your post du jour that could possibly be construed as suspension-worthy, I look forward to your return to this board on a "normal" basis and for continued constructive posts you will offer.
First, I know I will owe someone here an apology for not giving them proper attribution for what was their idea first. So to whoever suggested that the PLY folks could be utilizing VHUB as the vehicle for turning the limited liability company PLC into a corporation that can be publicly traded, first I think you may turn out to be correct, and second, I apologize for not giving you proper attribution here. There are just too many historical posts to read through this late at night in order to find the right person to cite.
I did not realize earlier (and this too was brought up by the poster I've been referring to)that foreign companies are particularly fond of using the reverse merger technique to go public. ...and here we have PLY as a China-based company.
So, armed with these fragments of knowledge, I remembered that FINRA or SEC had cautioned folks about the temptations that come with reverse mergers - and I actually found the article:
reverse mergers
Now that doesn't mean that any shenanigans are going to happen in the case at hand, namely VHUB, but since VHUB went into existence as a publicly traded company via doing a reverse merger into the Dog Inn shell, there actually is some history here.
...all of which is a long way of my trying to answer the major question on this discussion board as to why VHUB would be selling at such a tremendous discount to what many of us imagine ought to be the transaction-price demands of the major shareholders.
The question I would have for the seasoned folks here is whether there was a time when your instincts sort of told you that there may be a pump and dump ahead, but you stayed with the stock in the belief that you could exit at the pumping stage and not get stuck at the dumping stage.
...and again, everything else aside for the moment, this stock probably still has 8 million shares held by Fife/TCA. These are very savvy people who aren't going to get caught in some trap and would certainly use their influence to make VHUB's transaction "surgically clean" at a high exit price.
I don't know if I've moved the ball down the field at all with this post, but I do think I've made some sort of case that there's lots of uncertainty here, and that's what could be driving the discount in VHUB's price from what our various assessments of what a buyout price out to look like.
Good night to all, and good luck!
The irony, White Lightning, is that if the company wished to, they could inform us of the second fiscal quarter revenues, as in the past they've reported on monthly sales as early as the 18th of the next month. Even without considering the probable sale of the company/assets, the stock would appear to be undervalued a lot based upon the first quarter bottom-line net income (i.e. even after interest) as long as sales in the second quarter were perhaps $2.4 Million or better, allowing for the company's statement in the 10K that the second fiscal quarter is the seasonal trough in sales activity (which still makes no sense to me, given that the holiday gift season falls into the second fiscal quarter).
Since you invited guesses - and honestly nobody really has a clue here other than perhaps Cashbyers and his technical wizardry (this is not sarcastic, God forbid), but then would he have sold at 2 cents and returned initially about 10% higher before adding to his position on Friday? - my guess will be that the stock will ping-pong between 2.25 cents and 2.75 cents for most of the week, and close at the upper end of that range.
I would believe that any surprises are likely to be pleasant ones, such as some other potential buyer jumping into the picture or (actually what I think is more likely) a settlement of the $3 million litigation, as I would suppose that the defendant company is telling VHUB that even if VHUB wins, they'll just declare bankruptcy, so the parties may just as well settle.
Again, you wanted guesses, and you've gotten a guess which is worth the paper that it's not printed on. I'm looking forward to reading other guesses.
BobKS, yes, there is a risk of differential treatment of the management group versus the "lesser" shareholders, just as you described. I'm wondering if the tax code (and I'm a little out of my league here) might mitigate that possibility somewhat, in that the management group would do better getting their money via capital gains versus earned income.
Also, the Fife-held shares which are needed to tip the scales towards the vote needed to sell the company (OK, its assets) wouldn't vote yes towards the transaction if they were being shafted compared to the management group.
Overall, you've properly derived why there is currently such a large discount in the stock price from what most of the gang here thinks it would take Kyle and folks to accept the transaction.
Fair enough?
Good morning, decatsmeow,
You've already been beaten up for your post for reasons that actually make a lot of sense to me, so I'm not going to give you unconditional support here. However, in a discussion board where everyone appears to be of the same opinion**...
**I will even admit that I am in this group, as I couldn't imagine the Winthers, Perlingos, and TCA's 8 million shares (needed to get to within just a couple of percentage points of a majority of outstanding shares) would accept anything under a $10 million valuation for the company based upon historical sales numbers, so that's about 11 cents per share on a 90 million share base.
...the minority point of view, namely yours, does need to be respected, and here is where I find basis to your being cautious in your outlook:
1. If I remember correctly, ijoy which is a Chinese company just screwed over VHUB, so what would give the Winthers any faith that a second Chinese company would be any better predisposed towards good behavior?
2. While I disagree with your general theme that VHUB doesn't give a shit about its shareholders - after all, the Winthers etc. are themselves very significant shareholders and their stock value can't increase unless yours increases as well, not to mention all the internet-radio shows that the company did awhile ago to stimulate broader interest in the stock - I do think that communication about attempts to mitigate the FDA regulatory mess and about sales and earnings targets could/should have been better all along.
3. Nobody passed a law dictating that you need to report your transactions and holdings to this community, and it is bad manners to beat on you for posting your trading activities here, all the more so since you are going as far as to report your reasoning.
4. ...and I do agree with you that anyone whose PM to you is on the mean side probably is making your point about how a diverse opinion is required to maximize the usefulness of any forum. Still, whatever sin you committed to be disciplined by the overseer is something for you to ponder going forward, along with the prior responses to your post (sorry if that comes across as self-important, believe me I have a lot to learn about posting).
Overall, I disagree with a lot of what's in your post, and I do believe that VHUB shareholders will see gains from where the stock is sitting this morning, because if the PLY transaction folds, there is a lot of reason to believe that the traditional tobacco companies will jump in. Still, your reminders that you weren't the only person selling on Friday and its corollary that money can be lost as well as won need to be respected. If there were certainty, the share price would just stay at that level, and bid and ask prices would be identical. ...and that ain't happening in our lifetimes.
Hi dc key, and let me copy into this post an extract from VHUB's most recent 10K which mentions having a California manufacturer (specific name not mentioned). This doesn't fully answer your question by any means, but it does mention that they do use some California-based manufacturer which might or might not be PLY. Here's the excerpt from the 10K:
We use third party contract manufacturers to produce and finish our mods (“Mods”), including our Limitless Mechanical Mod, from facilities located in both Southern California and China. Our Mods, which are made from a metallic material such as steel, brass or copper, are custom machined to meet our design specifications. Once machined, unfinished products are delivered to our location in Simi Valley or to a third party service provider to be buffed, polished and to add various treatments and embellishments, such as paint and engravings. Finished products are then held in inventory for distribution and sale. In our fiscal year ended June 30, 2015, we relied on one manufacturer to machine all of our Mods and in the fiscal year ended June 30, 2016, we relied on two. Although we have relied on a limited number of manufacturers to machine our Mods, we believe manufacturing capacity is available to meet our current and planned needs. We do not currently have any long term agreements in place for the manufacture of our Mods.
Hope this helps and sorry I could not be more definitive.
Hi Devin and welcome to more active status in this "community." You'll find a variety of posts about PLY during the first few days after the December 30 8K, but the main thing for now is that you're not going to find a ticker symbol, because the company is a Limited Liability Company (LLC). That means it's a lot like Subchapter S corporations in that the earnings aren't taxed at the corporate level but rather are passed through to the tax returns of the various owners of the LLC.
The better "diggers" among us have discovered that the agent of the LLC is a lawyer who does patent work.
Enjoy your stay on this board, and since you got into the stock around two years ago at what was a volatile time for the stock, I hope that you're already profitable at current levels and will do very well during these coming weeks until the transaction is solidified.
I seem to be reinforcing others' posts here recently, and I'll take the liberty of reinforcing yours. I believe what's going on in recent days that adds to the plus of the technical pattern is that the good people of PLY have started to accumulate a position in the stock.
Just like you could, Decatsmeow, if you so chose, PLY can get up to just under 5% ownership and not to have to declare anything new to the SEC, I believe. Look, if they're going to be buying the stock at five cents or seven cents or even fifteen cents, they're better off buying a chunk of it a two/three cents from board-colleagues like Cashbyers who prudently read their own charts and thought it best to take the money and run.
This seems too simple and obvious - can anyone poke a hole or two in this line of thought?
Good Monday morning, Decatsmeow,
I find myself concurring with you on the future of VHUB stock, as I ponder what I imagine it would take for the Winthers to take their money and run (not quite run, though, as they'll have roles in PLY, I believe). I'm sure that Ralph Nelson Elliott is smiling upon you right now! Technical analysis which is confirming what fundamentals are telling us - as is the case here - is very helpful (and pleasing, I'm sure).
Enjoy the week!
Since we're into offering opinions regarding the value of technical analysis, particularly in regard to "special situation" stocks like VHUB, I'll offer my views this morning:
1. Technical analysis has the benefit of being impartial and objective; therefore, whatever technical analysis may indicate, it will tend to be believed and followed.
2. This often turns technical analysis into a self-fulfilling prophecy.
3. In the case of low-float stocks, technical analysis will tend to be less helpful, because some random sale (e.g. somebody needs the funds right now for whatever reason having nothing to do with the particular stock) or some random purchase can turn the momentum around in a flash. Also, the frequently larger spread between bid and ask prices makes profitable trading more difficult to achieve, creating the scenario of an "imperfect market."
4. It appears possible, if not probable, that the market makers are as familiar with technical analysis as anyone else and can arrange their own trading to create false breakouts in whatever direction they might find helpful to their own cause.
5. In cases such as VHUB where there is an acquisition in process, the swings caused by news or changes in beliefs as to what the transaction-outcome will be will generally be much larger than the swings that technical analysis can bring.
Again, these are just my own impressions regarding the topic at hand, and I've enjoyed reading the opinions that others have previously brought to this forum. Have a great week, everybody!
Thanks, Knife! I would believe that the Winthers' pathway towards majority control would be to entice TCA/Fife and his 8 million shares to become part of the coalition. That would take the 38 million shares held by the Winthers and Perlingos up to 46 million held by "the coalition," and 46 million turns out to be more than half of the 90.3 million issued and outstanding shares of common stock.
I believe that under this scenario, Fife's goals and the broad group of shareholders' goals (including the good folks who frequent this board) would be in alignment, meaning that the goal would truly be to maximized the exit price. The Winthers' goal would be, logically anyway, slightly different, as they would like to negotiate for themselves a consulting or executive arrangement going forward in PLY, and would trade something from the exit price per share in order to secure a role in PLY going forward.
Best weekend wishes!
Congratulations, Cash, I'll look at Twitter in a moment and be happy for you a second time. The term "pullback" (from 2.1 cents) is interesting when we consider VHUB's history of an intraday high near 2 DOLLARS back in spring 2014 and the couple of times that the stock subsequently bounced up to 5 CENTS after becoming truly a penny stock.
For the rest of the gang here, I've got a more practical-oriented thought about VHUB. It wasn't that long ago when VHUB's issued and outstanding common shares numbered around 67 million, such that the combined holdings of two Winthers and one Perlingos of 38 million shares constituted a majority.
Now, that 38 million shares in the numerator is matched with a little over 90 million in the denominator due to debt-conversions. ...which means that in order to sell the assets of the company (or sell the company itself, for that matter), I do think there'll need to be a shareholders meeting, or at least some formal attempt to secure a majority of the outstanding shares to be in favor of the proposed transaction. So get your questions and your popcorn ready!
When I first saw this morning that there were at the time 23 posts already today, I imagined that something new and material had transpired with Vapor Hub overnight. Instead, I saw frustrations with lack of knowledge regarding details of litigation and details of patent ownership, and frustrations among the brotherhood here based on one's vantage point towards the company.
I'll probably regret doing this, but I'm going to chime in:
1. Hostastock and RPH deserve immense respect for actually being in the vaping business and in general for having been small business owners in the era even before the new light of the Trump presidency.
2. decatsmeow deserves immense respect for putting his money where is mouth is, as calculations based upon his own posting history show him with perhaps even 3% ownership of the company.
3. CashByers deserves immense respect for the willingness to present the sometimes cruel-appearing reality of technical analysis of the stock.
4. Knife deserves immense respect for always being reasonable and courteous in his posts.
5. Katloose deserves immense respect for currently co-serving with CashByers as moderator of this board. It must be hard to see the gang behaving badly on your watch.
You all get the picture by now. I'm going to stop at these six examples of folks who ought to be respected and listened to, whether their advice is heeded or not.
I'm the most "questionable" person here, so I need to really add value here in order to "belong" to this exceptional group of board-mates. So let's talk about patents, and let's use the most recent annual 10K as the source document. Strangely enough there are only hints and clues about ownership of patents and trademarks by VHUB itself, but they are pretty strong hints:
1. From Page 6 of the 10K:
Limitless Mechanical Mods: Our Limitless Mechanical Mod (pictured below) was developed in August 2014 by our CEO Kyle Winther and our President Jake Perlingos. August 2014 is a time that followed the creation of VHUB via the reverse the merger with DogInn, so one would imagine that when employees develop something on company time, the patent belongs to the employer.
2. From Page 18 of the 10K:
Our commercial success may depend, in part, on obtaining and maintaining patent protection of our technologies and product candidates as well as successfully defending third-party challenges to such technologies and candidates....In addition to patents and trade secrets, we also consider our trademarks important in our ability to continue to develop and maintain the goodwill and recognition associated with our brands.
If one is going to write about patents and trade secrets, it would surely appear to me that there are some of these to actually be writing about.
That's the best that I can do for the moment, and I hope that helps move the debate down the field as to the intrinsic value of the stock for purposes of estimating what the buyout value of the assets ought to be.
Good day to all.
Good Thursday evening, Cash, and I enjoyed your post a lot, because what you were doing is really distinguishing between two forms of investing risk:
1. Falling in love with the company; and
2. Falling in love with its stock.
You made some strong points about how technical analysis can keep one from falling in love with the stock.
What's fascinating to me at the moment with VHUB is that, as regards the fundamentals, there are more potential good things that could happen than bad things:
1. On the bad side, the potential deal with PLY could fall through.
2. But on the good side, the February litigation could work out favorably, the second quarter sales and earnings could be better than the company's stated expectation that Q2 is the seasonal low, more suitors for the company could come into the picture, and the President-elect's anti-regulatory Weltanschauung (I've wanted to use that word for the last 54 years since the time of preparing for the SAT - it means worldview or philosophy) could really help out. Meanwhile, the company really doesn't have toxic debt anymore, and I don't think that's been fully reflected in the gain in the stock price this week.
So I could see a trading strategy of getting out and back in based on SMA's, RSI's, and the like. However, with the spreads between bid and ask, it becomes more of a challenge to make it work (how many times have I read here about people thinking that their order should have been executed, but somehow wasn't).
Best wishes in whatever way you wind up playing this hand...
Hi Gustavo, to answer your question, let me copy into this post the guts of my earlier post 6707 from December 31:
PLY will buy all of VHUB's assets. With the money VHUB receives, it will pay off the accounts payable and any other debt. There'll be lots of money left over, and that's what will go to the shareholders. In the end, it's not much different than if PLY just bought the company as a whole and paid the shareholders directly at the pre-set price.
So, the point is that you should benefit the same from the asset purchase as you would from PLY just buying your stock outright. Much of the thread since last Friday afternoon has been devoted to figuring out what the per share number is going to be - you've been on this board for awhile, and it would be interesting to see what your own guess might be.
If I remember correctly, we've had guesses from five cents per share to fifteen cents per share. All the guesses so far have been way above where VHUB closed on Wednesday, so the low current price is either a matter of recognizing the uncertainty that the definitive deal has not been negotiated yet or the Winthers have not issued a press release so that the folks already familiar with the stock can buy some more.
Happy new year!
It took me a moment, Hostastock, but I guess you meant Gotama who paid 15 cents per share in a conversion forced by VHUB - most of the gang on this board at the time the loan documents were made available had never seen a case where it's the debtor who can force conversion rather than the lender.
To answer your question, I think Gotama will be severely pissed if they took their loss anytime before the current story with PLY commenced. If Gotama is still holding their 4,095,605 shares (I cheated and looked at the 10K from 2015), they're going to be insisting that they get updated on a current basis on the negotiation between PLY and VHUB. However, they won't be selling their shares based on any such information because I think that would constitute trading on inside information.
...and I agree with you that the Winthers will be insisting that the value of the company for acquisition purposes thoroughly reflect Intellectual Property, like the product lines. Otherwise phrased, the transaction with PLY is a "sale of assets," and intangible assets like the value of product lines need to be reckoned into the negotiations.
Hello again, my friend,
1. By no means am I "the monitor" here. I recall now how somewhere the sign-up rules to this system dictate that a rookie gets three "introductory" posts before being allowed the regular (free membership) daily limit of fifteen. I'm not even the monitor at home, as my wife tends to run the show (she's a little less senile than I am, at least most of the time).
2. If all factors influencing stock price can be classified into either fundamental or technical, I'd tend to view "acquisition prospects" as fundamental, so I would respectfully disagree with your comment that "the fundamentals are the same as Friday." Besides the fact there is a potential, bordering on likely, acquisition, there now is the absence of toxic debt (the conversion factor with PLY is 85% of average recent market price, and that's close enough to market price so that I wouldn't deem it to be toxic). The absence of toxic debt, even if there weren't acquisition potential, makes the stock worth much more, at least in my mind, than it was before.
3. Your range of five cents to seven cents per share as company-valuation multiplies out to a range of roughly $4.5 million to $6.3 million. You'll get a lot of enthusiastic folks here thinking that you're on the low side (even my own number is nine cents per share) based upon estimated annual sales volume. What really could impact the fundamental outlook for the stock is whatever the President-elect clues us in on as regards the rollback of federal regulations.
Best wishes for the remainder of the week!
dc key, first, I'm delighted that you've passed the hurdle of being limited to three posts per day. You've got a lot to contribute!
Second, what fascinates me is that it surely seems, to me at least, that VHUB is more undervalued right now at its close today than it was before PLY came along this past Friday afternoon. ...even though the share price is a lot higher now than it was then.
The "regulars" here really are now transformed from long-term investors to arbitrageurs, believing that the stock is selling for a steep discount from a future-transaction's value - and endeavoring to benefit as that discount will narrow the closer we get to effecting the transaction. It takes nerves of steel to be an arbitrageur (the first draft of this sentence was a bit more plain-spoken and male-oriented, but I guess I've given in to political correctness at my advanced age).
What's a bit unique is that we're all left guessing for now what that transaction will actually look like, but believing that there's no way that the Winthers/Perlingos would sell out for less than X per share, with X varying from five cents to thirteen cents depending upon individual beliefs as to what it would take for the major shareholders to sell.
Where there is a difference of opinion on this board is whether there is anything from just wisdom all the way up to obligation for a press release to be composed and issued. There's a case to be made for any opinion on this matter, and no one ought to be ridiculed for whatever opinion they might hold. Right now, my opinion is that the company really ought to send a letter to its distributors explaining what's going on in terms less challenging to understand than the 8K (and a couple of fine distributors who are board-colleagues here will share the story with us in due course).
I hope that tomorrow will be even better than today!
DC Key, you sure ask some penetrating questions. As regards the shift from Q3 to Q2 being the slow quarter, I did find it pretty weird that a consumer products company would claim the Christmas quarter as the slow period. I'm not sure I can connect that to the transaction at hand as you've done, but I wouldn't deny the likelihood that you'd be correct - as I have no explanation at all, while you've come up with an interesting thought.
As regards $2.4 million being my guess for Q2 sales, if I remember correctly, I took the average of August and September sales, and that was the basis for my guesstimate for Q2. We had been given the July sales number in a press release, and we learned Q2 as a whole from the quarterly SEC filing, so it was simple subtraction to see what the August and September total was, and then calculate the mean average between the two, then multiply by three to get a quarter's worth of sales. If I remember correctly, I think I rounded upward.
I thought that a $2.4 million sales number for Q2 would likely correlate with a break-even bottom line for the quarter, as (again, if I'm remembering correctly)I took the projected decline in sales from Q1 and figured that about half of that would reach the bottom line.
As regards a "fine toast together," if your screen name correlates with your geography, i.e. if you're in DC, well I'm in Baltimore, so it could happen. Folks ask me for my favorite vintage, and I tell them...Manischewitz from maybe last Thursday (I moved up from Ripple from my graduate school days back in 1968/69).
To close on relevant-to-others note, I'll admit that I'm totally astonished that we're seeing an orderly market in VHUB this morning, with a gradual climb in the stock so far. I really had been expecting a delay in trading, then a big gapped opening ultimately. And so we are again reminded that there is a difference between well-written and prophetic.
Good day, Sir.
That was a really neat approach you mentioned regarding keeping the short-sellers away from borrowing your stock. Beyond that, thanks for the clue as to why a reverse merger may turn out to be the technique of choice for the upcoming transaction. Finally on a personal note, semi-retirement is an intriguing option which, I retrospect, I probably should have done on the way to full retirement rather than "going cold turkey" away from the working environment.
Thanks for the kind words, TJG! As long as I remain as appreciative to those who aren't fond of my posting style as I am appreciative to folks like you, the prospects are good that I'll continue to be a constructive presence in this group. Of course, this group, if all goes well, is going to break up in a few weeks, and I'll have to find another board somehow...
May your 2017 bring you good stuff, including profits, as well!
TJG, you'll find the hyperlink to an 8K SEC filing on this website or, in a more complete form as regards the various exhibits, on the SEC-EDGAR website. VHUB's assets are going to be acquired, if indeed the transaction does materialize, by PLY which is in the distribution side of the vaping industry.
So the gang on this board has been batting back and forth the question of what the ultimate value will be per share to the VHUB shareholder community, as the 8K was definitive as regards the provision of essentially a non-toxic loan to take out Mr. Fife's toxic loans but really quite speculative as regards what the acquisition transaction will look like.
Hope this helps...
dckey, good morning and thanks for having responded to my curiosities. You've had a long wait here, even if you would have unloaded some of your "4's" at precisely that right minute in the couple of trading days in the past two years when the stock price nearly touched five cents on an intraday basis before settling back down.
To answer your question, my own bias is very much against stock deals because it's highly likely that everybody would run for the exits at the same first available moment such that the holders of the acquired company wouldn't realize anywhere near the value they were told they'd be getting. As it seems to be the case here with PLY, you've got an acquirer that's an LLC so I don't think the question of stock even comes up unless and until a new corporation would be formed for purposes of digesting this acquisition by PLY.
Your comment regarding short sellers coming to borrow your shares is fascinating, so perhaps there is an advantage after all to holding stock in your name rather than in street name (despite lots of inconveniences if one does a lot of trading and hates trips to the post office to send stock certificates by registered mail).
But as ever, I don't hold myself out as being an expert on much of anything these days, as I've been retired for four years and haven't been a CFO for nineteen years (the last fifteen years of my career were spent as a federal health care regulator - sadly not at FDA regarding which there are a lot of questions to ask and to be answered as regards the vaping industry).
Finally, I'm saddened that an apparently good poster like you would be cut off from posting. There are always two sides to every controversy, so it's not permitted to me to judge whoever is judging you regarding the legitimacy of your posts, since I don't know their side of the story. But I am allowed to be saddened at your misfortune. (One might be interested in your dislike for capital letters, but my most recent experience with someone who didn't type capital letters was that his cerebral palsy made it very difficult for him to hit the Shift key in a coordinated manner - the fellow became a folk hero for the value he brings to that particular board which is a hangout for fans of the Boston professional sports teams.)
As usual, I've drifted all over the map in my post, but hopefully I've given you some value in return for your time. Enjoy today thoroughly!
Happy new year, CashByers,
I do believe that there will be several "main event" items on Tuesday, though it's really hard to guess in what order they'll appear:
1. VHUB absolutely needs to issue (at best) a press release that will explain what's going on in terms that somebody who finds it a challenge to read through an entire 8K filing (that means including all the exhibits on the SEC-EDGAR) can understand, or (at least) an "8K for Dummies" email-booklet for its distributor community which Hostastock or RPH will share with the gang here.
2. Someone on this board will tell the folks here about what the Level II situation looks like shortly before the opening bell.
3. I'll go to McDonald's for a cheeseburger (only kidding, my very orthodox Jewish wife would strangle me) if you or anybody else can find a share to buy tomorrow anywhere near .0115, or actually less than that, since I think you'd still be averaging down.
4. I am guessing there'll be a trading halt due to an imbalance of orders.
5. Some "voices of restraint" will emphasize that nothing is set in stone yet as regards the acquisition of VHUB's assets by PLY, so nobody should "get ahead of themselves," while other "voices of bullishness" will chime in that PLY's involvement is only the first salvo of a bidding war for VHUB.
6. In a case of humility on your part, your Twitter account will contain a tweet in which you will actually ask for advice - just as you've done in this setting - rather than just report your transactions. You should take a moment to be proud of your humility if indeed you go in this direction. You never know where you'll find good counsel, but you know you won't find all you could find unless you solicit advice wherever and whenever you can.
My guess is that before the market opens there'll be something to read which will be provided by the Winthers. I think the stock will take awhile to open, as the market-makers will be scrounging for stock to sell. I'll guess an open of six cents, a low of four cents, a high of seven cents, and a close of six cents - and I'll also guess that I'll be eating a lot of crow (OK, maybe gefilte fish instead) for having made such a guess, but honestly none of us has a clue right now (despite some analytical work that some of us have done, which you've seen on this board by now) as to what will be. In the end, I think the company will go for somewhere between my 9 cents per share prediction and Hostastock's 13 cents per share prediction; that will take a couple of months to play itself out.
Just enjoy tomorrow as best as you can!
I'm probably out of my league here, dc key, but I think your reference to "monies collected go to PLY" comes from Section 6.1 of the Senior Secured Credit Facility Agreement found on that piece of the SEC-Edgar website devoted to VHUB. Let me copy into this post what I'm referencing from the aforementioned Section:
Security Agreement. To secure the payment and performance by Borrower of the Obligations hereunder, each of the Credit Parties grants, under and pursuant to the Security Agreement executed by the Credit Parties dated as of the Effective Date, to Lender, its successors and assigns, an unconditional, continuing, first-priority, perfected Lien and security interest in, and does hereby assign, transfer, mortgage, convey, pledge, hypothecate and set over to Lender, its successors and assigns, all of the right, title and interest of the Credit Parties in and to the Collateral, whether now owned or hereafter acquired, and all proceeds (including all insurance proceeds) and products of any of the Collateral.
Forgive me for probably being a little dense here, but when you were asking "did anyone notice, etc.?" were you actually challenging any of us to find such a section of loan documentation, or was it just a rhetorical question on your part? Even if it was just a rhetorical question, I didn't mind devoting the energy to peruse the long legal document, as it brought back lots of fond memories of bond issue documents-meetings from roughly 25 to 35 years ago. Thanks again!
Wow, since 2014! I hope that you opened your position in VHUB late in the year.
Meanwhile, thanks for mentioning "reverse merger" by its proper name, as I had been fishing around in my head for that term when I had been referring to the transaction with DogInn upthread.
Incidentally, I'll confess that your astute mentions of both the reverse merger and the $3 million lawsuit in which VHUB is the plaintiff led me to look up your posting activity, as I'll often peak at their other boards when I see a good poster on this one - and I was amazed that today marks your first posting activity. So thanks for joining the group here, and it will be interesting to get more of your perspectives in the coming weeks.
Finally, if you'd like to share what first attracted to you to VHUB, I'd be interested... if you wouldn't think of it as bad manners of me to ask.
Good legal holiday, Hostastock,
As you always provide good input here, I thought it would be helpful to look into the VaporBeast transaction. So here's the source material:
VaporBeast
VaporBeast, ran an annual net income of $6.4 million, but that is pretax due to the fact that the net income flows right to the tax returns of the owners. So let's say that final net income after taxes would have been half of that, or $3.2 million. The transaction was for $26 million, so that's about 8 times the $3.2 million.
VHUB could run a final bottom line of about $1 million in this fiscal year if the sales volume crosses $12 million (that's a little bit less than just annualizing the first fiscal quarter, but remember we were told by the company that the second fiscal quarter is the slow period). So let's apply that multiple of 8 to the $1 million in earnings, and that would take us to an acquisition price of $8 million for VHUB. If there are roughly 90 million shares of VHUB, that $8 million comes out to be approximately 9 cents per share.
So, my friend, you've made a good case that based on a recent, known transaction (VaporBeast), VHUB should wind up being valued at 9 cents per share upon acquisition by PLY. Discounting by 20% to allow for the transaction failing to go through (per a previous post of mine), I'm going to guess that VHUB is going to run up to 7 cents around this time Tuesday morning. If there's a bidding war for VHUB, which is quite possible, that 9 cents could quickly turn into the 13 cents you've put out there in your post.
We'll all see soon enough what really does materialize...