Cytocore: More Management by Hype and Distortion
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It is one thing for a speculative company low on cash to get more money in a PIPE at a discount to the stock’s market price. But, it is quite another for such a company to give that opportunity to insiders, and then to shamelessly announce in a press release, that it was good news. Yet, this is exactly what Cytocore (CYOE.OB) just did.
Daniel Burns (a director), and Robert McCullogh (CFO and CEO) each purchased a large number of shares from the company for $2 per share on January 22. This was an 18% discount to the stock’s close on that day. And still the fools who “invest” in the company’s stock rejoiced by pushing the share price up 51% in the three weeks since this happened.
At the end of the quarter ended September 30, 2007, Cytocore had under $1 million in cash, and a negative cash flow from operations of about $1.5 million per quarter. So despite what the press release said, this was not an investment to "assist in the scale up" of the company's manufacturing, but rather a necessary investment to keep the company up and running.
I have written about Cytocore’s travails before, and I received some kind comments in response to my previous article.
Disclosure: I have no position in CYOE.OB.
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This article has 6 comments:
de
Goode
Goode
A corrected version appears on my blog. I apologize for any errors.
www.goodevalue.com/200.../
Goode
www.andrewtobias.com/b...
Best take heed to what it says or you may be sleeping in them streets over there in St Louis.
Look, you've seen my writing skills. I believe I can be as engaging, as provacative, and as funny as any professional out there. I believe talents on loan from God should be used for the betterment of the planet. Is Goode a benevolant errant knight bent on protecting us from ourselves? I doubt it. He IS an outstandingly gifted writer, to be sure. Funny as hell, right up my alley, but one with a bone to pick (very similiar, in fact, to me). I think that, for the most part, Wall Street goons are the greasiest creatures to ever slither across the earth. Not CCI, however. I admire their mission, missteps aside.
We're just fine. Relax.