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Cyberonics, Inc. Message Board

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  • Eggplant101 Eggplant101 Jun 26, 2007 8:22 AM Flag

    CYBX Newbie

    abrx, can you address the question of cost structure and profitability?

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    • Shares of the medical device maker are down more than -20% year over year. The company is coming off a poor fiscal 4Q07 earnings report that saw its net loss more than double on a -13% slide in revenues. Last year, CYBX had to restate financials for several years thanks to a stock-option grant review that cost the company's CEO and CFO their jobs. - "Business As Usual"

      Since you're new here, I feel compelled to reveal I have held numerous short positions on this company for several years - having once again exercised my positions as the PPS dipped into the 15's and low 16's recently.

      To sum it up - IMO the company lost focus on what they did best, and followed their "Pied Piper- Skippy" into uncharted waters - spending their small war chest of monies on an application that failed to receive insurance coverage and ultimately failed to receive medicare/medicaid coverage.

      Once leading investors to believe that the device could treat depression, obesity, parkinsons, and numerous other indications - of course that did not transpire - never the less the money was spent, 100's of employees were hired prior to approval and acceptance from insurance providers. There-in lays the money problems.


      • 1 Reply to abrxtroubles
      • Thanks, abrx. I know CYBX has been a busy short over the years, and may still be today. I'm just trying to be objective. Lots of busy shorts have little or no revenue, or horrible margins. But CYBX has real revenue, and very high gross margins. There's a business here. I'm just surprised that the spending level has stayed so high. The CEO left in November, yet his successor did not quickly take an axe to the SG&A and R&D spending. Why? Isn't Icahn involved now? I doubt he will tolerate the company flushing $ down the toilet. With such a high gross margin, this company could be run for cash and would look pretty snappy. Also, NOL's will shelter income from taxes. It seems quite fixable.

69.950.00(0.00%)Oct 15 4:00 PMEDT