Rajiv,
Well thought out points, granted. I doubt CYSP is as crowded a short as it may have been before Friday's run, i.e. covering shorts contributed to run up.
Some inuts do run for a few days, but mainly on pending announcements/buyout rumors, etc. Once the news hits, they fall. Every daytrading yahoo around thinks he has outsmarted everyone else by buying friday for Monday's pop. Already I have seen posters indicate that they plan on selling sometime monday after the pop. I tried that myself a couple of times and got burned, because the reality is that I wasn't ahead of the game like I thought. These things nearly always fall when the news actually hits.
Revenues for the 4th quarter did improve, but still no profits. Stock didn't exactly scream on that news either. In an interview with Marketwatch earlier in the year, the CEO claimed the 4th quarter would be proof they were on the right track, that they would be a money maker, etc. Well, all the 4th quarter proved is that this company can sell furby's, but not profitably.
Balance sheet is clean, they are using stockholders money to fund operations, with absolutly no indication that at any time in the foreseeable future will they be able to fund operations from revenues. They will either need to sell more stock, or issue debt, but IMO will need to raise additional funds before they become profitable.
You last point says it all, and that is why CYSP will fall monday, friday's action was simple an overreaction to very boring news, and the correction will occur Monday. |
