A Wrong Password for Cloud Star Corp (OTC:CLDS)

CLDS.pngThe computer and the internet – two of the hallmarks of mankind’s technological progress during the last couple of decades. We have fallen deep in love with them and it seems that it will be forever and ever. There is one problem, though. People are generally smarter than machines and there will always be that person that will be able to outwit your personal computer and break into it. Since we do just about anything through the Internet nowadays, the hacker could steal vital data, personal details and… well, you have probably heard all that before.

Cloud Star Corp (OTC:CLDS), however, say that they have invented a gadget that will protect your computer and will even make your life easier by allowing you to access it from everywhere in the world safely and securely through your mobile phone or tablet. Sounds good if you need that sort of thing.

There will be an initial price for the gadget that will supposedly resemble a USB drive and you will also need to pay a subscription for the hosting services. All in all, no shortage of potential revenue for CLDS.

Did you notice the future tense of the verbs above? That’s the biggest problem that we have with CLDS. While they have a fresh and potentially useful piece of technology on their hands, they seem to be more focused on issuing press-releases rather than getting the security gadget finally on the market. Probably because of this, until about a couple of weeks ago, nobody seemed to be paying much attention to them but then the promotional effort on them started, third parties spent quite a lot of money, and the result is pretty clear from the chart. While the price at the beginning of March hovered around $0.30, a couple of days ago, they reached $1.47 per share. In other words, a $138 million market cap. Do they deserve it, though?

Well, the technology might sound pretty exciting and while the press-releases about new acquisitions are coming in every couple of weeks, it’s still far too early to call it for sure. One thing is certain, though – they are in a pretty terrible financial state. Here are the figures as found in the latest quarterly report for the period before November 30:

  • cash: $4,149
  • current assets: $4,449
  • current liabilities: $26 thousand
  • no revenue since inception
  • net loss since inception: $216 thousand

At the same time, the pumpers are hot on their heals and they are even comparing them to computer security giants like Symantec Corporation (NASDAQ:SYMC), but in reality, this sort of parallel could only suggest that the people who wrote the emails ran out of things to say.

04IWEB.pngWe thought hard about a company that could really serve as a good comparison to CLDS and we found it – IceWEB, Inc. (OTC:IWEB). They are also developing some sort of complicated cloud technology and, just like CLDS, they get featured in paid pumps every now and then. You can see from the chart on the right that while the promotions could give you tiny windows for a profits, the overall performance is not that great.

That’s why you should be careful in considering the risks when making your decision on CLDS.

You may also like...