Honestly, I'm hoping we hold our ground.
I'm not necessarily pessimistic, but the shareholder update should be treated (by CYGX management, not us) as a declaration of intent more than a genuine PR. It definitely contained some tantalizing material, but in order for that material to be taken seriously by investors, we need to put some meat on those very appetizing bones.
There's a tendency for us as shareholders to react with anticipation to any communications at all that talk of future potential, and I find myself having to rein in my enthusiasm and look pragmatically at the contents of these things. In this latest one, although future opportunities are addressed, the most meaningful statements are related to the management changes.
Why are those most meaningful? Because they actually happened - at least in part. There actually was a re-org (LW and FV out), there actually was a new CFO appointed, and there actually has been a consultant retained to improve investor relations.
Now, granted, some presentations were made to government agencies, but none of those has actually resulted in anything yet. Even the SBIR mentioned can only result in a maximum of less than a million dollars in grants, so although we've applied for it, it's just one more small step - not a done deal.
Regardless of whether you're a "basher" or a "platinum warrior" (or, most likely, neither), there's a common interest here that people tend to lose sight of:
This stock is only ever going to go up on real demand.
By real demand, I mean that in order for the stock to be worth $5.00/share, somebody has to be willing to give me $4.95 for every share of CYGX I own, and somebody else has to want it so badly that they'll outbid that guy and go to $5.00.
That's a far reach at this point, but it's useful as an easily-seen example. To cut a little closer to the matter, let's bring those figures into line a little.
This stock has recently traded as high as $0.80/share, right? As of Friday, it had climbed to $0.55/share. So how do you get it from $0.55 to only $0.80 again? Demand, right?
How many people would it take - people who were climbing over themselves in a bidding war - to get that price change to occur? More than a couple, in all likelihood, and they'd have to rationalize that increasing bid price against the recent history of the stock in which it had traded very suddenly for as low as $0.37/share - less than half of what somebody would be paying with their $0.80 bid, or a 50% loss.
I'd take those risks if there was promise of reward, but it would have to be a pretty good promise. Is CYGX offering those kinds of potential rewards at this exact moment in time? Some might think so, some might not.
I can tell you that I've made money on stocks that have offered those kinds of rewards, but the reason they were believable opportunities was because of a track record. Either the company itself or the individuals running it had a history of pulling off things like government contracts/grants or successful marketing to larger partners that generated actual revenue in the millions of dollars.
This latest CYGX statement is waaaay better than the absence of communication that preceded it, but it simply isn't the same as, for example, news that a $3M dollar contract had been signed to provide synDNA for somebody over a 12 month period. It provides some insight into what the company has done, and what it intends to do, but provides absolutely nothing that makes this stock worth $0.80/share again.
In short, it was a tourniquet, and a badly needed one, but we still need genuine news about some solid progress that can be quantifiably applied to an expectation of growth. If the investing community at large - not the people who already own the stock and love/hate it - is not convinced that buying today will enable them to sell at a profit at some point in the relatively near future (and $0.80/share would be rather massive return of 45%) the demand that underlies that sort of price gain simply will never materialize.
Good for Malcolm for realeasing this statement. Better for him still that he's initiated a campaign to regularly communicate with investors to forestall meltdowns like the one we just had.
But we still need news. And I mean the real stuff. Not the hype, not the potential. I'm talking cash-in-the-bank/ink-on-the-contract/gotta-put-an-ad-in-the-paper-for-shipping-clerks type of news.
Short of that? Hope you've got a hobby to keep your mind off the stock price for a couple of months, cuz it simply won't go a whole lot higher. I could be wrong, but I doubt it very sincerely.
Still, I think they did a nice job with the update. Overdue? Yes, but it got done, and that's pretty important.
