MCig dives; SA author critical of valuation, competitive standing


SA author Charles Moscoe, who states he's a "consultant for a major player in the electronic cigarette space," believes mCig (MCIG -11.4%) "has no proprietary technology," and that similar Chinese OEM products can be easily procured.

Moscoe also: 1) Notes mCig had Q3 revenue of just $85,109. 2) Argues mCig's VitaCig unit (set to be spun off) "competes in [a] highly fragmented electronic cigarette market" dominated by Lorillard and Altria. 3) Notes the company's recently acquired glass vaporizer product has only seen sales of $2M over the last 13 years.

Updated March 25, 7:26 p.m.: After talking with mCig CEO Paul Rosenberg, Moscoe substitutes an author update for his original piece. Moscoe says he's now "able to see the differences between the mCig 2.0 and the devices I had originally compared it with," and says the fact mCig's primary product (mCig 2.0) only launched 60 days ago suggests the company's story is "still in its infancy." But he maintains it's "extraordinarily overvalued." MCIG +2% today.

This was corrected on 03/25/2014 at 07:27 PM.
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Comments (12)
  • mistercrinkles
    , contributor
    Comments (16) | Send Message
     
    No more article due to the obvious shorting?

     

    The obvious shorting I called out and got my comment deleted?

     

    Can't wait to be banned from SA for spreading TRUTH.
    24 Mar 2014, 05:43 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2863) | Send Message
     
    I feel like this doesn't belong in the "Breaking News" section. SA posted a piece by a person, whom they do not verify is actually a consultant, on basically a microcap stock, which the editors have to know will drive the price down. Then they highlight that SA author called it, and SA moves the market. All his article really says is they only have 1 quarter of revenue, and the valuation based on 1 quarter of revenue is high. Also gives no proof on them not having proprietary tech, or any data on VitaCig, or anything else. SA seems to like being able to influence small stocks, and the fact they're hyping both the long and short side of the "pot stocks" cheapens the site's integrity, to me at least.

     

    I get you're trying to make money, but the fact the website posted a negative fluff piece on a small cap, and it went down, isnt breaking news, just as its not breaking news that if you post on a small cap and it goes up.
    24 Mar 2014, 05:46 PM Reply Like
  • Jason Aycock
    , contributor
    Comments (255) | Send Message
     
    Mike:

     

    I wanted to reply to your comment since it was a good opportunity to shed some light on how we work. I'm the managing editor of Seeking Alpha's Newsteam.

     

    You all know that as a site, Seeking Alpha publishes hundreds of articles a day, pieces bullish and bearish on any of thousands of securities. Many more instablogs exist as well, written by folks who want to sign up and contribute.

     

    Over here on the news side (what you're reading now), it's a bit different. Our team's decisions are separated from those on the Opinion team's -- we don't have a say in what opinion pieces go out, and vice versa -- and my overriding goal is determining what's news to subscribers like the 2,243 folks who subscribe for information on MCIG. When something is moving the stock 11%, we want to bring that to those subscribers' attention. Sometimes it will be because of market events, C-suite changes, etc. -- and sometimes it will be an SA article ... even if that article ends up withdrawn/updated, like this one. So "news" needs to be considered in light of what the stock's alert subscribers consider news. There are many factors that go into newsplay, but an 11% decline for thousands of subscribers merits some attention.

     

    To other commenters: We pulled this news item out of an abundance of caution after the piece was withdrawn, even though we qualified the contents of this item as coming from Moscoe's piece. It's back here now so that we can add the new information, and not just leave the old info sitting unaddressed in your inboxes and mobile notifications. The goal was getting more information into your hands rather than less, since more information equals better decisions.

     

    As always, thanks for commenting.
    --Jason Aycock
    Managing Editor, News
    25 Mar 2014, 07:46 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2863) | Send Message
     
    As I see it, you repeating a link to the article is trying to drive more traffic back to SA, and add legitamacy to the site as a whole. I'm not arguing with you, but in this case, lets look at the facts. SA published something very negative by an author. The stock, which has a small market cap, went down. SA reported, as news, that the thing SA published made the stock go down. The company called and complained (I'm assuming), spoke with the author, and either the author, SA, or both pulled the piece. Since I've never heard of this happening before, except for someone who use to write on the coal stocks, I'm assuming SA was either threatened with legal action, or the author was, or both parties acknowledged that what had been written was wrong.

     

    Why isnt this update into the piece by SA being pulled up on the home page? It says it was updated a half hour ago, but its not what shows up on the site right now. Isn't the author of a publication that dropped a stock 11% coming out and publicly admitting less than a day later that what he wrote was not correct "news to subscribers like the 2,243 folks who subscribe for information on MCIG"???
    25 Mar 2014, 08:11 PM Reply Like
  • Jason Aycock
    , contributor
    Comments (255) | Send Message
     
    You ask: "Isn't the author of a publication that dropped a stock 11% coming out and publicly admitting less than a day later that what he wrote was not correct "news to subscribers like the 2,243 folks who subscribe for information on MCIG"??? "

     

    That's exactly why we posted the update above. It's tied to this item to get it into the hands of those who consumed the initial information. And of course it shows up on our MCIG quote page, portfolios of those who own MCIG, etc. We have concise information here as well as a link to what the author is saying today.

     

    As for your other question, about SA reporting that an SA article made the stock go down: The alternative would be when an SA contributor -- and there are many -- makes a case either way that definitely moves a stock, that we on the newsteam just pretend like that didn't happen. That's a disservice to those who sign up for news alerts (and of course, you can sign up for opinion article alerts, news alerts, or both ... but my concern is our audience in the news section).
    25 Mar 2014, 08:20 PM Reply Like
  • kylesch
    , contributor
    Comments (43) | Send Message
     
    I'm quite surprised the author admitted to being a "consultant for a major player in the electronic cigarette space."

     

    Surely a major competitor of MCIG would never pay a consultant in an effort to reduce the threat they face from MCIG.
    24 Mar 2014, 05:57 PM Reply Like
  • kylesch
    , contributor
    Comments (43) | Send Message
     
    Hah, this is funny.

     

    SA has pulled the very article they claimed was "breaking news"!
    24 Mar 2014, 06:01 PM Reply Like
  • ssphx
    , contributor
    Comment (1) | Send Message
     
    thankfully the article was pulled. MCIG will be featured by Jane Wells on CNBC Wednesday at NOON PT. Let the company do the talking and tell their story rather than someone who calls themselves " a somewhat insider". I am a somewhat " warren buffett" on a good day when the market is up a couple of hundred points. LMAO

     

    Charles Moscoe is too chicken to fully disclose.
    25 Mar 2014, 03:04 AM Reply Like
  • User 20828281
    , contributor
    Comment (1) | Send Message
     
    I like to find out who shorted Mcig before this so called "breaking news". It is very possible that Mcig, already have filed lawsuit when the dealer ask the dealer ask to show all cards.
    24 Mar 2014, 11:26 PM Reply Like
  • User 20573591
    , contributor
    Comment (1) | Send Message
     
    I didn't realize SA was such a rag paper. Started reading SA as a source for research, but it's obvious that there's other motives at work here. Good Bye SA.
    25 Mar 2014, 03:04 AM Reply Like
  • Green&Golden
    , contributor
    Comments (39) | Send Message
     
    After further investigation the author realizes what he wrote needed further clarification - ie. He didn't do the proper research.
    Maybe he thinks he is doing us good by publishing an article that was not researched properly, I think it is irresponsible.
    Anyway, I'm not mad even though the "story" broke just after my purchase yesterday...I bought more today!
    25 Mar 2014, 07:35 PM Reply Like
  • lsguitars
    , contributor
    Comments (6) | Send Message
     
    Well he succeeded in doing what he wanted, and that is to drop the price yesterday, A lot of people lost money because of the panic sell off. It just isn't right in my opinion and there should be some consequences here. Us investors/traders in this were perfectly fine without his negative comments. We have all done out DD on this stock and if we want to own it and take the risk then that is our problem. We don't need someone to let us know that it is overvalued and is trading at mega multiples..... duh it's a freaking OTC marijuana stock. But does this company have any debt..... no. There are so many other stock out there that are on the big boards as well, that haven't even turned a profit, but they are trading at a higher price per share. Why? However, I believe and it shows by Paul Rosenberg's quick response that he cares for investors, other than his own benefit. Thanks buddy!
    26 Mar 2014, 09:24 AM Reply Like
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