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The warrants are not going to be paid off for nothing! When working out the fully diluted market capitalization of the company you need to add back in the number of warrants! That is the reason for the low share price. I cant work out why people think that the holder of the warrants is somehow going to give them up. I appreciate that he might not exercise them until much later down the road - but that is just timing.
I dont see why it has to be manipulation that the stock is trading at these levels. Its trading at these levels because they are continuing to issue new equity hand over fist, and there is no reassurance that this wont continue. Like it or not, the bears have been right.
I am a decent size long and it make me feel sick to see 45m warrants issued like it is nothing.
Of course its diluted. "Potential" for dilution above 25c is still dilution of all upside above 25c whether they are currently vested or not. What scenario can you possibly envisage where the holders of the warrants will not exercise them at some point in the future?
45m warrants is equal to the entire existing free float! We are being diluted out of the game in favour of the investor who will end up exercising his warrants and owning the company. I imagine that is his plan (and fair play to him), but it doesnt help us.
Far too much dilution is going on here. Is it really necessary for every new lending agreement to enjoy quite so much equity upside? Our equity will never be worth anything at this rate, which is a shame since i am a big fan of the company.
I am based in the UK and spent some time in the US recently on business. I think that the US stockmarket has got this company completely wrong. Ecigs are huge in Europe, yet in the US I barely saw anyone smoking one. They are everywhere here, you see them in the streets, in bars, restaurants.
The potential is clearly this side of the pond and into the emerging markets. Both on the consumer and the regulatory side. I think this company is playing its game well by expanding quietly over here and building its brands. The market will catch up as usual eventually.
You cant buy marlboro's off the marlboro website, but they still seem to shift them!
All my local stores in the uk stock vapestick products, and the train station shop whsmith, where i buy my newspapers, is fully stocked with VIP products from a couple of weeks ago.
I asked whether they stocked juice, and the man opened a drawer, absolutely stuffed with vip juices. So the distribution is certainly out there.
if the shorts want to pick up pennies in front of the steamroller then good luck to them i say. we want lots of short interest getting squeezed.. thats what gives us the 67% up days!!!
Dilution is over. This thing will go up like a rocket, since with the balance sheet sorted for 3 years, the stock should trade on revenue multiples, not liquidation value. This is pretty much the most bullish announcement any investor in ECIG could possibly hope for.
Presumably the next stop will be the adjusted high of $3. From there is anyone's guess.
I've been in this game for some time and thought i'd seen it all, but the past ten days trading of ECIG*D* has been something else!!
Have a look at the shareprice of Amazon and maybe you can let us know... :) They have never operated at a profit for a single quarter in their history.
At this point you are correct. However the big money is made buying companies when you believe the market has got their valuations completely wrong. You buy when blood in the street.
So the SEC asked them to restate their accounts from last year to re-account for some of the debt. That explains a) why they sacked their old accountants, and b) why there has been a delay on the current earnings report.
So little by little the smoke is clearing. These boys are clearly getting the house in order. All good stuff.
Street level vaping is far more advanced without question. However the big money is in getting scale of distribution into the mass market. The enthusiast/hobby market is not where you will make your big bucks.
im not sure the 10k has been overhyped at all. Quite the opposite. The stock has run down 70% on anticipation on record volume!
actually my broker would not allow me to buy or sell until the settlement of the new line of stock came in. They had a complete lock down which was only released at close of business last night.
I think you are wrong about the noteholders not selling, since the huge volume on friday, and the aggressive selling on thu/fri clearly points to a supply of new stock being liquidated into the market.
Indeed! The number of bullish v bearish posters is zero indication. Just as the day to day price swings mean nothing at all. The market does what it needs to do. I am long from 6c and have zero interest in where the stock trades tomorrow. I like the story, I like the management and i am happy to be a long at the valuations where i got in. Nothing else matters to me because I paid effectively liquidation prices, and i believe the company is worth multiples more than that.
There is nothing brave about it. The convenience market is not "down", the growth of the measured market is slowing. This is a well reported number.
This is because the market is beginning to evolve and many of the single unit convenience purchasers are moving to tank systems from the first generation cigalike units.
Secondly, it makes very little difference what the existing vapers 'want'. They will get what the legislative landscape provides them. This is very possibly going to be a sealed tank system, with eliquids that are certified by a small number of large manufacturers.
The 'hobby' market will persist, but it will no doubt require home mixing of nicotine liquids, which will turn off all but the most die hard fans.
All my opinion of course!
Tracked channels of "e cigarettes" may well be in decline, but my understanding is that this is to the benefit of tank systems, of which ecig are tapping into with their AVS.
I understand your point of view, but the regulatory risk in this market IMO is that there is an attempt to ban open liquid systems. This would make pre-sealed tanks such as AVS the only game in town for the mass market.
This article is not entirely correct regarding shorting securities.
You technically could short a stock in unlimited quantities without a borrow, but the transaction still has to settle in the market a few days later, and at that point you are required to deliver the stock. If you do not deliver the stock then you fail at the settlement level and there is a fine/buy-in issued by the selling broker. At some point (a matter of days NOT years!!) if the seller cannot borrow the stock, then the naked short will have to buy in his stock in the marketplace in order to get the shares he needs to make the original settlement. The buyer expects his stock to be delivered!
The borrow may or may not be hard to come by, many of the large retail brokers lend their securities books, and your stock will eventually be used at some point to finance someone elses short! However this is on a 1 to 1 basis, not unlimited.
There are many misconceptions regarding how much power the 'shorts' have, and this is one of them. Every short has to eventually find the stock he has sold to deliver to the buyer, and every short is by basic necessity also a buyer on close of the trade. Large short positions are inherently short-medium term bullish (presuming the company is not going bust), since these people, whether market makers or not, do not have unlimited money to finance their drawdown on squeezes in price, they have to account for their P&L just like everyone else.
I also believe that the large VIP shops are as much about presence and seeing if the formula works, than any long term commitment. My understanding from speaking to the staff in the shops is that they are short term pop up units, with an option to renew if they choose.
What a silly move to vote against the company. Let them do what they've got to do. These people running the company arent out to screw us. They are also going to make their long term returns from the shareprice.
They do care about the share price. However their job is to generate long term returns for all stakeholders NOT for the daytraders. They have no reason to screw shareholders.
But ultimately it does come down to whether you trust the management to do a good job. Thats the whole point of owning shares in a public company. These guys have a pedigree, which is the entire reason i own the stock. If you dont trust them, the right move is to sell out, not to vote against them.
wow ive just read the 14A again. I stand corrected!
A share consolidation / reverse split does not leave the Authorised Shares at 300 million! Come on guys this is equity markets corporate action lesson number one.
Everything gets reduced by the same amount - the O/S, the A/S, any outstanding convertibles also see the same reduction pro-rata to the R/S ratio!
How does the R/S keep the company solvent? The only way they will stay solvent aside from normal cash flow, is to raise cash either via issue of debt or equity.
Therefore presumably the most important requirement in this regard is that shareholders approve the small increase in authorized share capital?
Usually preferred shares are 'preferred' because they rank higher up the tree in a bankruptcy, e.g. they are issued with fixed dividends as interest bearing securities. I would not normally expect them to be issued to gain control the company. Maybe ECIG will provide further clarification before the vote. Special voting rights tend to come in A/B/C share issues.
I agree with that entirely about the R/S. Too many people are voting against the R/S because they are trapped in the stock from high prices and are scared that they might not see those prices again post R/S.
We need to look forward not back. The stock has had massive dilution and needs to be consolidated back to a smaller float with a higher PPS. This will get us uplisted quicker which should be a priority.
I would love to know how its possible to be a buyer and also hold a stock down at the same time??! Maybe you can enlighten us!
The company has limited capital resources. I would be very concerned if they used that precious cash to buy up stock from the market.
Why cant people get their head round this! A R/S makes absolutely NO difference to existing shareholders. Come one guys this is stock market 101. The capitalisation of the company remains the SAME. It does not secretly benefit the debt holders or the authorised shares which will face a re denomination of their convertibles & price thresholds just like the ordinary shareholders.
There is no difference to have 10,000 shares at 5c or 1000 shares at 50c.
Voting against the r/s will achieve only one thing, which will be delaying any uplisting or marketing of the stock to institutional shareholders. The result of this will be in all our detriment.
I agree with you 100%. People need to hold their nerve. Just because some traders are prepared to sell their equity at 5c does not make them right.
Let the selling take its course. Once the excess free float created by the convertibles gets mopped up we should see the stock move higher. Its really just basic market technicals at work.
I would much rather that the management of ECIG spent their day running the company rather than fielding calls from shareholders with $500 worth of stock. Sorry to put a dampener on this, but the management have no reason to update us, because NOTHING HAS CHANGED!!
If you disagree with their plans (increase of A/S, R/S) then vote no when they put out the final plans, or go along to the meeting. Otherwise wait until the results come out in a month or so and take a view.
These guys are all ex-board members of some of the largest consumer products companies in the world. Have some faith in them to do their jobs for goodness sakes.
They are not up to their eyeballs in toxic debt. the share price has collapsed because much of that debt has been converted to equity.
I have no idea why everyone views a reverse split as a negative.
The PPS is completely irrelevant IMO. Its all about the market cap, which is currently worth substantially less than the revenues of even one of their subsidiary brands. The reverse split brings the share price up to a level whereby the company can a) move to a proper exchange, and b) attract institutional investors. It also makes no difference to the convertible note holders who would also see their instruments adjusted in proportion to the split.
The quality of ECIG management speaks for itself. Blue chip experience on a BB stock is a rare gem indeed.