You poo-poo former management's brazen investor deception, but I don't. It's important to the Cybermedia story. They have fairly middling software products, and have managed to market the hell out of them, pissing away 8 digit marketing expenses each quarter. This is not actually economically rational, but they managed to show accounting profits by stuffing the channel and bloating up accounts receivables with phantom sales. Well, guess what, the lie has been exposed and old management has been sacked. Instead,they have new overpaid management that have been loaned money to buy stock.
Revenue and profits, which were an illusion in the first place, have soured,while fat marketing expenses remain the only manner in which they can move product. Recent deals with Microsoft and Gateway are light on both the green stuff and potential upside participation. Oh yeah, they also carry the baggage of 8 class action lawsuits suing for management miscreancy that was not only blatantly obvious and stupid, but also altogether provable.
It is in this context that you speculate about equity investment by a
Microsoft or a Softbank. A software company only gets one bite at the apple. You think that any good programmers have stuck around through rough seas on a sinking ship in this tight job market?
Now that the dipsy-doodle in the wake of the IPO has been laid bare, there will be no white knight once the treasury runs dry. You say that this stock will see $10 before it sees $2. I disagree. If I am right, would you be willing to structure my investment partnership? You can even invest the money you saved by not holding CYBR. |
