CYBL Analysis – Share Price Implosion Part 2 and the Way Forward

Given CYBL awful trading days on and before February 21, I figured it was time for a part 2 update from my previous article on the CYBL’s recent implosion. You can read that here for more background on the CYBL situation (I can’t believe its been two months… time flies!)

Let’s get to it.

Recent Implosion

I hate being hyperbolic, but CYBL’s share price is tanking pretty hard right now even after the initial implosion after they got slapped with the CE. CYBL opened on Feb 17 around 0.005, where it had been hovering for the past three months.

However, on Feb 17 and again on Feb 21 (CYBL was probably happy for President’s day on the 20^th), CYBL dropped from 0.005 to 0.0017 per share, a 66% drop.

There are some rumors about what exactly the trigger for it was. The most plausible explanation I’ve heard is that some of the big brokerages finally stopped letting their users purchase CYBL. I am less versed in this (because I don’t touch anything with a CE), but I do know that some trading houses cut off companies with a CE quicker than others. It appears that on Feb 17, most or all of the remaining big brokerages have cut-off purchases of CYBL.

To make matters worse for CYBL, you can still sell 😊. And oh boy that’s what people did.

Not to wag my finger or anything at people who expected differently, but I had very little confidence the CE would be taken off before April/May at the earliest. So I knew CYBL would get booted from most brokerages eventually, it was only a matter of time. If you gambled that it would be quicker, it sucks but that’s part of taking risks.

All in all now, they’re down 0.011 right before the CE to 0.0017… down 85%… yikes.

Key Issue – Insert Quick Rant

Rant alert – skip if you don’t care. The crux of the issue with CYBL is that their management basically half-a**ed reporting for the past two years. They released something like 40+ re-issued quarterly and annual statements over the last two-ish years, which is probably one of the most amateur-ish things I’ve seen on the OTC (which is saying something).

They have / had a very serious issue with their reporting quality for years and the chickens have come back to roost as my mom used to say. We know there were issues with their awful reporting of their Preferred Share structures, which I’ve ranted about before (*cough-cough Preferred B disclosures around conversion).

But at this point the issue could be much worse than we thought, we don’t really know what else could have been wrong. Are they going to re-state earnings, are there ownership positions not disclosed, etc.? This much uncertainty is a near-death sentence for an already volatile penny stock.

So here’s my rant – management did their big Operation Alpha restructure a few years ago which turned the company into what it is today. They chose to keep the company public so they had liquidity for their massive ownership stakes (eventually common shares via Preferred B). But then they completely neglected their reporting quality and could even keep Pink Current.

As a rant side-bar, there are some obnoxious scam companies run by complete buffoons who are able to at least keep their companies pink current. Hell, I’ve seen pink current companies put out disclosures with review notes still in them, handwritten notes, crossed out sentences, typos, scanned papers with stains on them, etc. And CYBL couldn’t even keep up with that?!?! OTC Markets is so lenient as it is with pink current and CYBL still managed to f*ck it up…

Back on track here… needless to say, management wanted their cake and to eat it too… they wanted all of the good with being publicly traded without nearly enough of the work. Also, this company is “profitable”, so you’re telling me they couldn’t throw 300k a year on legal and accounting to become at least pink current? It makes me wonder if there’s something else going on too…

It’s completely unacceptable.

Now, enough doom and gloom…

The Way Forward

Okay I’ll stop complaining. Where does CYBL go from here?

First, they need to re-issue two years of annual filings (corrected: annual, they don’t have to do quarterly from what I can tell). Their updates on their progress have been… vague… to say the least. It doesn’t sound like much has been done concretely other than “we’re working on it”.

So we need those two filings, plus a Q1 2023 report in May, They have work to do.

Because of this, and because they haven’t really given a firm deadline, I would say the absolute best case scenario is they get it all done by April 15, when their 2022 annual report is due. So they effectively need to reissue 2+ years of past reports and in quick succession release the Q1 2023 report.

I’m putting the likelihood as low.

My current timeline is something more like June when they get it done. Then it will be another 30-60 days before the CE is removed. So my current semi-optimistic timeline is that we’ll be able to begin trading sometime in like August. And that assumes OTCMarkets actually accepts their filings, which is no guarantee. So August could quickly become October.

Second, and going off the first point, management needs to rebuild trust with the market. Again, these guys wanted publicly trading shares, so that means the public needs to trust them. I don’t think many people really do anymore.

I don’t see a share price rebound until CE is gone and we see AT LEAST two quarters of quality financial reports issued on time. I think trust in management is that eroded, and the market is showing it.

Third, and it’s weird that this is less important than points #1 and #2, but we need to see the business growth they outlined in their master plans come to fruition. If we see a sputtering business, even with better quality reports this company is dead in the water.

Now, if we can actually trust their prior financial reports, the company is somewhat on track, growing, and profitable. So if they can keep that up, and it’s real, then I think we will finally see some share price relief.

So to sum up, we need to see:

• Pink current and CE removed.
• A track record of subsequent filings being of high quality and timely.
• Continued business growth consistent with previous forecasts.

To be quite frank, if even one of the three above don’t happen, I think the company is toast.

If you don’t think the above is possible, then it’s probably time to cut your losses.

If you still believe in CYBL and think this is attainable, then… well good luck trying to find a way to buy more shares! You can do it the old-fashioned way and call people up to buy some more 😊. Just kidding, but if you do manage to buy more at these prices, I wouldn’t expect a share price pop anytime soon, if at all.

Either way, I’ll keep following and updating as needed.

Anyways, that’s all I’ve got this time. Thanks for reading and apologies for the rants.

Article Sponsors:

Get an exclusive discounted offer for Seeking Alpha Pro: https://seekingalpha.me/SamAker

THIS ARTICLE IS NOT FINANCIAL ADVICE AND IS INTENDED ONLY FOR EDUCATIONAL PURPOSES. I AM NOT A FINANCIAL ADVISOR.