Sentiments around Vapor Corp (NASDAQ:VPCO) stock have changed from bad to worse in the wake of the company issuing a letter to shareholders that caught most of them off-guard. The stock is nearing its 52 week low of $0.0008 a share, having closed the week on a low of $0.0009 a share on 467 million being dumped in the market.
Revision Of 2014 report
The selloff came with the announcement that the company had changed its independent accounting unit and that the new auditor required a revision of its 2014 annual report. Financial results for the first quarter of 2015 will have to be delayed as the auditors move to include any adjustments. Vapor Corp (NASDAQ:VPCO) is currently trading from its all-time high of 45 cents registered last year March, another reason for increased red flags around the stock.
The Street is keenly awaiting the financial report as it is expected to paint a clear picture of Vapor Corp (NASDAQ:VPCO)’s outstanding convertible debt. The street is also awaiting to hear the amount of conversion notes that have already been issued as investors fear the stock might be over diluted. Over the first three months of the year, the company is reported to have converted $1.7 million worth of convertible debt into common shares.
Common Stock Dilution Concerns
The downward trend might persist should the Street’s concerns of an over diluted stock be confirmed attributed to the conversion of debt to stock. Since the start of the year, Vapor Corp (NASDAQ:VPCO) outstanding shares have ballooned to 2.6 billion from 930 million a key concern that has seen some investors offload their stakes in the company.
However, the company’s management affirms that the company’s operations continue to grow at an impressive rate expected to offset any horrific dilution of the common stock. The management team is also remaining confident that it will be successful in eliminating all the convertible debt by June awaiting to see how this will be achieved.