CyberDefender (CYDE) Dips as StreetSweeper Questions Operations
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CyberDefender Corporation (Nasdaq: CYDE) shares slid over 20% lower today following a negative view on TheStreetSweeper.com. Shares hit the 52-week low of $2.60, but have recovered late in the day today, now trading down only 2.7%.
Sweeper noted that the company recorded its first profit ever following a change in accounting practices that allowed them to slash advertising revenues. The stock, hovering at $4 per share on the OTC Bulletin Board, then made a smooth transition to the Nasdaq. However, shares then fell below $4 less than three weeks afterward, and has never beat the level since.
Sweeper also notes that the only firm that covers the stock, Crowell Weedon, still has a Buy rating on the shares with an $8 price target. His optimism hinges on future profits that may be hindered by shrinking margins, falling renewal rates, and potential massive dillution.
Others view their operation as a sham, unable to compete with the likes of McAfee (NYSE: MFE) and Symantec (Nasdaq: SYMC). They attribute growth to spending more on "sensational" advertising, costs that are far surpassing revenues.
One computer expert that Sweeper cites says, "It is not very effective, which is probably why it has never been submitted for certification."
Sweeper goes on to say that CyberDefender saw a 120% increase in revs for 2008, to $5 million, but advertising expenses increased 1000% to
$7.11 million. The following year, they used warrants for millions of shares of cheap stock to pay for an advertising deal secured with a Guthy Renker unit.
All in all, the article points out some very important fact about the company and its operations. Click
here to read the full article.
CyberDefender owns DoubleMySpeed.com and MyCleanPC.com.
Sweeper noted that the company recorded its first profit ever following a change in accounting practices that allowed them to slash advertising revenues. The stock, hovering at $4 per share on the OTC Bulletin Board, then made a smooth transition to the Nasdaq. However, shares then fell below $4 less than three weeks afterward, and has never beat the level since.
Sweeper also notes that the only firm that covers the stock, Crowell Weedon, still has a Buy rating on the shares with an $8 price target. His optimism hinges on future profits that may be hindered by shrinking margins, falling renewal rates, and potential massive dillution.
Others view their operation as a sham, unable to compete with the likes of McAfee (NYSE: MFE) and Symantec (Nasdaq: SYMC). They attribute growth to spending more on "sensational" advertising, costs that are far surpassing revenues.
One computer expert that Sweeper cites says, "It is not very effective, which is probably why it has never been submitted for certification."
Sweeper goes on to say that CyberDefender saw a 120% increase in revs for 2008, to $5 million, but advertising expenses increased 1000% to
$7.11 million. The following year, they used warrants for millions of shares of cheap stock to pay for an advertising deal secured with a Guthy Renker unit.
All in all, the article points out some very important fact about the company and its operations. Click
here to read the full article.
CyberDefender owns DoubleMySpeed.com and MyCleanPC.com.
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