Sphere 3D Corp. (ANY)

[Hugodrax]

I tried to warn people about the daytrading swarm that was in the stock over the last few trading days. Now they have moved on to the next POS penny stock. Their volume in the face of the awful (IMHO) Cyrus news was a total gift.

I calculate that ANY is out of money now. $5M cash as of Sep 30 and I estimate cash burn is around $5M. Usually companies that are on the brink can stretch things out for a bit so I give them mid to end of Jan as a guesstimate (remember after the Opus money came in they burned about $8M that quarter as they had stretched things so far?)

The Cyrus bridge loan starts amortizing next month. The Opus Bank loan had redacted "business plan" and other unknown financial covenants. The debt all has cross-default provisions.

IMHO it's a game of chicken now. Sounds like if ANY doesn't agree to a debt to equity conversion (which would dilute current holders into oblivion at current prices) plus management changes etc they aren't going to kick in more money and it will be up to Opus and Cyrus to call the loans, in which case equity will probably get wiped 100% IMHO.

The interesting thing is that Cyrus is probably the only one silly enough to be willing to inject more cash into this thing (haven't learned their lesson after $80-90M far), but they rank behind $18-20M of Opus debt. So Cyrus has leverage over management and the equity holders, but little leverage over Opus. But if they are willing to fund a restructuring they might have a bit of leverage w/ Opus - I doubt Opus will want to inject more money given they are blowing up themselves from bad tech loans, but they are dumb so who knows.

Management that doesn't get fired can always get reloaded with RSUs and options in the newco. Even EK if he gets sacked, assuming the company is solvent, will get a fat golden parachute.

It seems the only folks left without a chair now that the music seems (IMHO) about to stop are the poor retail shareholders that funded this whole thing.

Eric Kelly's total comp in 2015 was $2.3M. PT's was only $2M though.


IMHO....