TPHAM83, I enjoyed the quality/depth of your post. If I were to press you about VHUB, it would be in regard to the following:
1. Management (which you've mentioned) - this company is in that awkward stage when growth is rapid, and the few are doing the jobs of what ordinarily would be done by the many. Can VHUB avoid "the fatal error" during this time frame?
2. Step-variable costs - At the moment, the gross margin on sales is wondrously large, but there comes a point when what had been fixed costs blow past their relevant range, and new resources need to be added to meet the growth (and then these costs remain fixed again, albeit at a higher level of volume). Can VHUB create enough profit fast enough to add the next layer of resources? (This is sort of expanding the first point beyond management depth to now include production and sales resources.)
3. Overhang of stock from those who bought too early - Not all the holders of under-water positions will sell in December, and there will be those who will in the future keep some lid on the price of the stock by looking to sell as the stock would tend to climb.
4. Cost of working capital - VHUB will be financing lots of receivables in coming months, and it may be a challenge to match the due date of payables with the expected liquidation of receivables into cash. This is part of the dilution issue which you and others have raised; at some point, interest expense becomes sufficiently prohibitive that you're stuck selling stock.
5. Ethics baggage - Can a company which was in the "pump and dump" game not that long ago be trusted in terms of its financial statements? We already have on record management addressing their self-identified material weakness of insufficient segregation of duties by retaining a CPA firm to come up with a plan. That would be fine, if only the selected CPA firm were not Winther & Company. That gives self-dealing a bad name...
I do realize that the swing trading mentality banks on the emotions of others creating momentum, and that the mantra is that it's not the company one invests in, but rather the stock. So I would not deny the distinct possibility that the stock will become a "cult favorite" (I sort of like the idea myself of a vaping company keeping itself "pure" by not getting into drugs, even a drug which has been legalized here and there). Still, when all of the bulls on this very message board head for the exits at the same time, I don't believe it will be a pretty sight.
Thanks again for your excellent analysis!
