A quick #guide on how to avoid dilutive #pennystock companies.

From the perspective of a “long” position into this company, I’ve highlighted “red flags.”  The share structure as seen above, authorized shares and outstanding shares are very important to review.  In this case, the company has 1,000,000,000 shares authorized and only has 213,676,990 outstanding presently.  However, the company will be allowed to sell common shares, or pay off debts using company shares all the way up to the 1,000,000,000 authorized share amount; this company has a setup to dilute shareholders a lot, this is a major red flag if you’re looking at this company from the “long” side.  You can also use this information and know that if this company were to ever rise up to a share price that would be worth selling short, you would most likely want to short sell a company with such a dilutive share structure.

The company has also done a 1 for 40 reverse stock split, this is also very common practice for dilutive companies to do, which isn’t good for shareholders.

The next thing I will do is review recent SEC filings. Specifically the 10-Q and 10-K.  I https://www.otcmarkets.com/stock/VAPE/filings  I will compare a few 10-Q reports, the current quarter and the previous quarter before this and compare the outstanding share amounts, checking if there is a change in the outstanding share amount.  If the O/S amount is increasing from quarter to quarter, this means the company is potentially paying for services or compensation using common shares or warrants, etc.  I will search muse through the filings, looking for dilution warning signals such as “options” “warrants” “convertibles” “promissory notes” debt, is the company paying for services using common shares and/or convertible debentures – this is terrible for shareholders in the long run.  You’ll want to avoid these types of companies from the “long” side (but great for short side if the price is high enough).

For example:  For the quarterly period ended March 31, 2016, there was 366,873,168 outstanding shares. https://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=11407795

For the quarterly period ended June 30, 2016, there was 657,936,872 outstanding shares.https://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=12019939

So in the 3 month period the company issued 291,063,704 additional shares! HUGE RED FLAG

If you search those above 10-Q reports for the other dilution warning keywords that I mentioned earlier, you will see that VAPE has a lot of convertible notes payable, this will really hurt shareholders in the long run, you pretty much want to avoid companies like this from the long side, it’s like playing with fire, you’re going to get burned eventually.

Exporting stock option chains to Excel. $SPY $TSO $AAPL $FB $NFLX $TSLA

1. Use Firefox browser.

2. Install the extension called “Table2Clipboard”

4. Hold down the CTRL key to highlight the cells you want, right-click, table2clipboard, copy selected cells.
5. Paste into Excel
If anyone has come across a better method, or another software that can do this process in a more automated process, please let me know via email or twitter reply.