I don't know how familiar you are with technical stock jargon, but here is an explanation for you. ECIG just recently IPO'd on the OTC market. During this time a company issue shares to initial investors, most of which are locked shares, meaning they can't be traded for 6-12 months. This leaves very few free floating shares (tradable shares). Now I am not 100% on the facts here, but this is my understanding...
say there are only 10,000 shares available to trade, and some short sellers come along and short those shares (Shorting is when someone borrows shares, immediately sells them and hopes to buy the share back at a lower price, which they return to the person they borrowed from, and they pocket the difference) However short selling shares have a time limit as to when they have to return the shares, and if they do not do it in time they could face penalties and be banned from trading, if they do it too much.
So anyhow, the time limit on the short shares is coming up and they go to repurchase the shares, but say in this case, there is a new story about ECIG which hypes everybody up, and nobody wants to sell their shares, because they think they are worth a lot. Well the short sellers are shit out of luck and have to buy the shares at whatever price is available, and this can drive the stock up very fast, as the first few shares are sold 15% higher, than 30%, 80%, etc as people see the price going up rapidly, they raise the price they want to sell them for and BOOM, you have what is known as a short squeeze.
This is my understanding of what happened with ECIG, and frankly the price of the stock is astronomically high, and as soon as the trade restrictions are lifted on those shares I was talking about at the start, ECIG is going to PLUMMET! about down to where VPCO is if not lower (unless there are some major developments in the mean time) Based on the shares outstanding+financials, ECIG should be around the same level or lower as VPCO.
Think of it this way, right now ECIG is valued at over $1 BILLION, which is ludicrous for a company that reported $1.5 million in sales, with a $626,000 net loss last quarter, the math just doesn't add up. I am not saying ECIG wont succeed, but now is not the time to buy that stock, and in my opinion the best bet is VPCO right now. VPCO is much more established, larger product line, more patents, way more sales. I myself was very dumbfounded at yesterdays trading, after what seemed like a great financial report, but I will be patient and I know that VPCOs price will soon be up where it should be.
whew, sry about the long explanation, I hope it helps. Good luck in your trading!
