Electronic Cigarettes International Group (ECIG) has withdrawn its application for an initial public offering (IPO) on the U.S. NASDAQ stock exchange, but kept the door open for a private offering in the future.
The company – which controls important e-cig brands such as Vapestick, Victory and VIP – submitted an application to the U.S. Securities and Exchange Commission (SEC) on 15th December requesting its S1 form applying for an IPO be withdrawn.
ECIG cited deteriorating market conditions as the reason behind the application for withdrawal.
Stock in the company is still traded on the OTC U.S. market, which is not supervised by an exchange. Its price there declined sharply following the announcement, falling about 20% by late afternoon New York time today, with trading volumes about five times their usual level.
ECIG had seen a small uptick following two recent announcements and a positive third quarter.
It recently announced a memorandum of understanding on distribution with TDR, a tobacco company with significant market share in southeastern Europe. The deal would see ECIG’s products distributed across TDR territory in countries such as Bosnia and Herzegovina, and Croatia.
The company also announced that its VIP brand would open a blending boutique in a major shopping centre in east London in the UK, where vapers would be able to mix their own e-liquids.
What This Means: The announcement is a setback for ECIG. Investor confidence in the company will have been shaken and potential backers would need to see some serious positives before electing to support it again.
– Freddie Dawson ECigIntelligence staff
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