Cybergy Holdings Inc (OTCMKTS:CYBG) Receives Another Blow From the Pumpers
On Sunday, Super Stock Tips and the rest of the newsletters owned by Action Medial Holdings tried to convince their subscribers that Cybergy Holdings Inc (OTCMKTS:CYBG) is about to raise the bar sky-high. Some investors probably disregarded the fact that Action Media Holdings received $13,000 in order to spread the optimism around, and they jumped in. Most likely, they’re feeling a bit bitter at the moment.
Instead of raising the bar, CYBG crumbled and lost nearly a third of its market cap in a matter of just six and a half hours. That’s not the first time CYBG has left investors disappointed, though.
Up until the middle of April, everything seemed pretty calm around the stock. Then, the pumpers came along and they quite literally ruined it. We have received more than sixty emails since then, but despite all the touting, CYBG managed to drop from just under $1.90 all the way down to $0.25 per share.
For the statisticians among you, this means that the ticker annihilated nearly 87% of its value in a matter of just over two months. For those of you who are not that obsessed with figures, it means that it took quite a beating. Time to find out whether it deserved it.
On the face of it, CYBG doesn’t look like the typical pumped OTC company. For one, it logged more than $6.5 million in revenues during the first three months of 2015 which goes to show that unlike a majority of its promoted OTC counterparts, CYBG is actually a working entity. That said, it’s not without its faults.
The aforementioned revenues, while respectable, are 25% down from the ones achieved during the same period of 2014. The rest of the 10-Q is not much to look at, either. Here’s a summary of the figures:
- cash: $83 thousand
- current assets: $3.6 million
- current liabilities: $87.5 million
- quarterly operating loss: $1.3 million
A vast portion of the truly gargantuan liabilities comprises of derivatives and they, in turn, are connected to some convertible debt. As we mentioned in some of our previous articles, more than $3 million worth of debentures can be turned into common stock at the equivalent rate of just over $0.04 per share, and the management team did say in the 10-Q that they expect to see the debentures converted before their maturity dates. About a month ago, they also filed an S-1 form registering the shares underlying the debt. It still hasn’t been declared effective by the SEC, but it’s fair to say that severe dilution in the near future is not out of the question.
And while the people behind CYBG have definitely managed to get the company business going, we can’t ignore the fact that some of the names found in the SEC filings have been connected to other, somewhat sketchy OTC enterprises. As we mentioned a few months ago, Cybergy Labs, one of CYBG‘s subsidiaries, was once called BION Enterprises LLC and it was involved with Amwest Imaging – a horrific Awesome Penny Stocks pump.
Mark Gray, CYBG‘s CEO, also has some experience with other OTC companies. He was once a Director of Hansen Gray & Company, Inc (now known as Get Real USA, Inc (OTCMKTS:GTRL)). At one point, he decided to leave, but it’s fair to say that his departure wasn’t exactly peaceful.
So, while CYBG definitely isn’t the worst penny stock out there, there are some things that you need to keep an eye out for. The appalling stock performance, in itself, should warrant a lot of extra caution, especially while the pumpers are still around.
