Vapor Group Inc (VPOR)

[Tony_the_Tiger_1973]

Toxic debt is basically a loan that can either be paid back by the company or converted into free trading shares. It's usually a combination of payments and conversion. However the lender makes more money from the shares usually so they short the stock to force an early conversion... That's what happened when this Stock went under a penny- it allowed the lender to start converting before maturity. It was in the contract the whole time. They shorted it so they could sell and then told the company they couldn't make any large payments. This is because they get the shares at .001 and can sell at whatever market price is. Right now they're essentially tripling their money. That's better than the 8-30% interest they would get from the original note. Get it? Also if they allow it to go higher then they make more money so they may not choose to sell everything right now. Hence the reason the dilution MM BMAK is hanging back at .0035.

The toxicity usually comes from the fact that the share price gets diluted when the debt is cashed out. The price has been brought down due to the sale of couple million dollars worth of shares. There is not that much buying so the price just tanks. The lender is selling because they want their money, not because the company is bad. Therefore we have an artificially low price. The CEO has announced that the debt is almost gone, and that they don't need that type of financing anymore. We should expect some dilution over the next month as the debt dries up, but should also expect demand for shares to increase with this knowledge.

I can't really see the price getting lower than this, and based on historic revenue and estimated share count of 2.6B we could make a run to three to four cents very soon.

My sell target is currently at 3.6 cents and I'll hold another 6 months to get it.