I just found this company and need some insight from longs and no bashers! I live in AZ and people smoke like smoke towers I have been to a bunch of stores and I cant find prouduct any where. I went to their website it wasnt to helpful either I dont smoke, but I bought a pack of their disposible prouduct on their website, nice packaging by the way. I dont like to buy B-B stocks but this one looks promising. LO has Blue RAI is making their own with a computer chip inside and MO is coming out with a E-cig in August the only other company not saying anything is Vector Group! So here are concerns one if MO goes with their own like Rai they are going to bomb the shelves and low ball pricing and advertise till no end so with out a buyout will this company survive? MO have not really stated if they are making their own? Disclosure I am long LO! Thanks Mike
Just like regular tobacco customers who like VPCO products will continue to use theirs due to taste etc. VPCO's margins are quite large and similar to regular tobacco products currently. Big tobacco has barely even dipped their foot into the e cig business. MO and RAI are still using test markets in single cities in the U. S. Big tobacco domination is years away.
There is going to be a shift over time (some think a 10BB shift) over the next 5-10 years from regular tobacco to e cigs. As this occurs big tobacco will lose revenue from regular cigs. A recent Loriliard presentation mentioned this is happening already. As they lose more regular tobacco revenue are they going to want to replace it with lower e cig revenue? Nope, shareholders are going to demand similar or increased revenue. With that being the case big tobacco maybe able to lower the prices temporarily or some but ultimately they are going to look for increasing revenue. Hard to get increasing revenue when you replace your bread and butter with a lower revenue business. That will not happen, especially when e cigs are marketed as lasting as long as 2 packs of cigs. That in of it self will demand a higher price.
Where VPCO needs to be vigilant is in advertising. VPCO has a decent marketshare ( 5-16%?) already and as the FDA eventually comes to regulate the industry it will help to weed out the real small players and eventually provide a barrier to entry. The more market share they can eat up now in a new fragmented industry the better.
I believe at some point VPCO will be bought out but for now its the only publicly traded player in an industry growing 50% a year. Less
Thanks Mike.. LO is a good company.. but theyareso big, success in this market may mean a 1% to the bottom line if that.... for VPCO, which is on thousands of retailers shelves, success for it could mean a 2-300% rise.... here on the east coast their products are everywhere..