Moby,
Went out for a run and have done a little more research on CYSP. At this point I don't think we will get a gap up in the morning, I will probably short more at the open. The business and the fundamentals are incredibly weak.
They don't lay out a plan for profitability in their filings, their operating expenses increase much faster than revenues. Their gross margins are declining, even though revenue's are climbing, although revenues are incredibly low for a company with this kind of market cap.
Operating expenses include fees they pay to advertise, so I now must assume operating expenses are going to climb higher.
All I see they have been good at is selling stock to the public. Get this, this company has been in business since 1994, but has yet to show a profit. If you can't make a business profitable in five years, you need to get out of that business. All they say in their filing is that they expect to continue to incur net losses for the foreseeable future.
I've checked out two of their web pages, certainly nothing special.
Revenues increased by 121%, but cost of revenues increased 181%. Can't stay on that trend for long, pretty soon they will be paying customers to buy products.
Also, they attributed most of their increased sales to electronics products, which yield lower than average gross profit margins.
On paper, this looks like an incredible short. We shall see. |
