Since New Year, the shares of Cyberplex Inc. (TSE:CX
), (PINK:CYPXF) have been sinking deeper and deeper on the Toronto Stock Exchange (TSE). The downfall was additionally reinforced by the heavy trading volumes observed over the last ten days.
Since beginning of 2011, CX has decayed by more than 68%. The largest slump in the price was two weeks ago, just when Cyberplex announced its Q4 2010 financial update. Perhaps this triggered the enormous shares' plunge.
The mentioned release brought negative news - company's officials admitted they were maintaining substantially lower traffic levels recently. The CEO of Cyberplex even made the following confession: "in midâ€December we began to experience average revenue per click decreases and the strategies we customarily deploy for responding to such decreases were not as effective".
This simply destroyed the company's stock, which one day after the release tumbled down by 53% on an unseen volume of 45M shares traded. It remains a bit peculiar why the company's directors made such negative statements in public.
Last Thursday, Cyberplex revealed the acquisition of EQ Advertising Limited - a provider of media buying technologies and services - which would allow the company to extend its distribution capabilities. As stated in the release, in 2011 Cyberplex Inc. will concentrate its efforts on enhancing its traffic acquisition strategies. The company has a long-term strategic partnership with "Yahoo!".
This news was not able at all to revive the falling shares. If there is hope for a reversal upward trend, it lies maybe in the company's financials. For the third quarter of 2010 Cyberplex reported record revenues of over $44.7M, 59% more than the relevant quarter in 2009, as well as a positive operating cash flow of $5.5M. Perhaps the long-term debt of almost $27M raises some concerns.
Cyberplex Inc. provides on-line publishing and customer acquisition strategies. It has two reportable operating segments: Web Advertising and Technology Services. The company, through its subsidiaries, leverages more than 300 proprietary web properties and a vast publisher network.