So far, May has not been a good month for Electronic Cigarettes Intl Group Ltd (OTCMKTS:ECIG). The stock price is on decline and has almost eroded all the gains recorded in last week of April. On Thursday, the stock price dropped almost 5% to close the trading session at $0.380. However, on Friday it bounced back and surged more than 4% to close the trading session at $0.385. The gain came at a share volume of 1.61 million compared to average share volume of 2.73 million.
The momentum
Although currently Electronic Cigarettes has few positive things going in favor of it, it is fair to highlight that it has succeeded against worse odds. Even after all the terrible financial numbers, reverse split shenanigans, all the misunderstandings and the company’s Chief Executive leaving, Electronic Cigarette still has a solid following that believes it is prepared to achieved great things.
The good and the bad
Electronic Cigarettes is a functioning company with products launched in the market and some serious revenue in its books. However, the company’s miscommunications and questionable management decisions in the past have proved costly to investors. So, as evident the main problem lies with management and if the company can work over it, it can probably turn into a profit generating machine.
Non-dilutive financing
Electronic Cigarettes issued non-convertible loans worth $41 million, retired and bought left over ‘Notes’ and established the conversion rate for them. The tenure of latest issued non-convertible notes is 36-month and is classified as non-dilutive capital injection. The company opted for it to improve its balance sheet and get some financial flexibility.
The repayment
The principal repayment will start later in 2016.The Chairman and CEO stated that the financing will help to eliminate toxic and discounted notes which in turn will strengthen financial position of the company. It is work as an effective way to manage the capital structure.
