Looking into ECIG a little deeper and past all the speculation/hype it is getting right now. I found two things that could be the reason for the fall of the PPS and current trend.
Before I dive into it. Know, i do not hold a position in ECIG yet. I have been watching this company close since about mid-Dec. IMO, i do believe the PPS is suppressed at the current moment and a positive correction is inevitable to what price? I do not know - i would only be speculating. I could see it balance out somewhere in the .20-.30 range in the near-term IMO.
The following is IMO after some recent DD...
1) Read the most recent Financial report - all though they picked up revenues they also assumed ALOT of debt in a very short time frame. Plain and simple any time a company shows 40mil in debt - it will have an adverse effect on the PPS. Especially an independent.
2) Reason for the pullback from the IPO and decline in price. Starting back in late Q1 up in till the scheduled IPO. ECIG (among others in the industry) got absolutely slammed by every government health organization you can think of: FDA, CDC, AHA, WHO, etc. As well as individual state legislation: NY, MN, and state Attorney Generals - Even US Senators jumped on the ECIG bashing band-wagon. Then mix in a handful of studies/surveys suggesting teens using Ecig's more and more.
(I am not posting links to articles with the above mentioned organizations gh, senators, etc. for the sake of time. Do a google search and you will find them.)
You can begin to see how this negative press was a, "bad time in the market" for the IPO. Essentially meaning, Wells Fargo and Co. Decided to pull the chute and see how this all plays out. Even with their success - this is a disruptive technology and business. One, that will be eventually regulated and once that happens I bet the IPO talk will begin to happen again.
I also would speculate that some if not all of this negative press came from big tobacco companies themselves with their Lobbyist's on the hill. Perhaps, they saw they were behind on the Ecig game and see the recent shift - decline in tobacco sales across the board and essentially became more aggressive on the defensive side of things. Remember, Big Tobacco's reach is very deep - with nearly bottomless pockets, so to speak.
Bottom line - I do see the value in this company. I do believe the PPS is suppressed currently. However, as they openly stated months ago. It is a very turbulent time in the market for ECIG.
Best of luck.
