Archive for the ‘CYGT’ Category
Obituaries: CYGT aka The Stock That Killed My Hedge Fund
Today, Cygnus (CYGT), a long-time Ticketmaster-wanna-be, lost their long-time battle against bankruptcy. They had been struggling ever since their first brush back in early 2006, barely clinging to life as if their leader was Terri Schiavo, but today, they finally succumbed to Chapter 11, the most common ailment among penny stocks.
The company, founded in 2001, is best known for their role in bringing down my hedge fund, Cilantro Fund Partners, LP—accounting for a roughly 35% loss—and causing me endless grief from the joke that is “the financial community”.
As detailed in my book An American Hedge Fund, in mid-2004, after nearly six years of uninterrupted six-figure annual profits, my ego and real world inexperience—aided by a top notch presentation delivered by the then CFO, a family friend—led me to invest 10% of my fund in this privately-held company.
Wall Street Sequel: Idiots Never Sleep
Actually, the name of the sequel to the hit movie Wall Street is Money Never Sleeps and when it debuts in 2009, I have little doubt that its focus will be on absurd sums of money, greed, opulence and corruption in the finance industry. As will the upcoming TV show about hedge fund managers from Entourage creator Doug Ellin. Unfortunately, this is what the majority of people in and out of finance think Wall Street is all about (while there should be more emphasis put on the journey as the awesome There Will Be Blood does (saw it two nights ago, review forthcoming).
10 Companies With Sweet Technologies But Sour Stocks
Never invest based solely on the potential of a company’s technology! Nearly every smallcap company has a great story, but very very very very few of them will ever make it because success is much tougher than most people can ever imagine. It’s one of my book ’s greatest lessons.
The Sykes Pattern Is Alive And Well, And I Will Teach Everyone, Including Myself, Seriously
TIM $14,195 (up $43 on the day)
Short 1,000 MWY @ $3.29
Another Near Miss, I Really Suck Lately And That’s OK
Covered my 1,200 ZVUE right at the open at prices ranging from $2.12
Im Beginning To Like That Old Guy Because He Seems To Inspire Selloffs!
TIM $14,443 (down $2 on the day)
Shorted 500 JMBA @ $5.04, Holding Overnight
Today is a day where I really hate the bastards at the SEC for imprisoning people with accounts worth less than $25k. Finally some nice volatility 
, perfect for day traders of all shapes and sizes (well, not ALL sizes)!
IAAPA, Cygnus and the iPhone of Ticketing
IAAPA is no ordinary expo. This year over 27,000 people attended, not only because it’s the attraction industry’s largest annual event, but because it’s hella fun! After all, the 1,000 exhibitors trying to sell their products by showing you how fun they are. Check out the pics:
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Yup, that’sme in that crazy inflatable futuristic sumo suit—right before I got taken down hardcore by my fifteen year-old opponent!
Yeah, I definitely need to bring a real camera next time instead of relying on my alleged 3 megapixel camera on my phone (no way this is even 1 megapixel!). Anyway, in addition to having the hottest models of any exhibitor, Sega showcased their 3-D Theater which really rocked!
Ahh yes, the reason for me attending the expo in the first place—Cygnus (Other OTC: CYGT.PK) was debuting their new ticketing platform aka my only hope at salvaging my “investment” in them.
In a word: incredible.
Not only did I get a chance to have a long chat with their new CEO—Steve Brown, a somewhat confident yet conservative man—but I got to see how excited everyone—and I do mean everyone: Six Flags, Hershey, assorted zoo and museum directors—was about this new software. As Steve Brown says, “it’s the iPhone of ticketing”.
To give you a little background, Cygnus has always had an amazing online ticketing platform—how else could this tiny company win the contracts to handle the entire online ticketing operations of industry leaders like Six Flags, Universal Studios, Hershey Park and Cedar Fair—but they never had a front-gate solution and this lack of a comprehensive package hurt them when bidding on contracts.
Long story short, this new platform handles everything: online, front gate, kiosk, mobile (now through a deal with Shoptext, Cygnus sells tickets by text messages). It’s a clean-looking feature-rich checkout platform that should really win everyone over, attractions and consumers alike. Attraction execs love it because it upsells customers with add-ons (decreasing the need for expensive-to-train seasonal employees and not unlike companies that have had massive success with this: Vistaprint (Nasdaq: VPRT) and Amazon.com (Nasdaq: AMZN). Think, you’re buying 3 day passes and the software asks you if you’d like to upgrade to 3 season passes for $25 more.
Perhaps more importantly, no longer will consumers have to keep navigating back to their shopping cart page—now, after an attraction (or dare I say any company) inserts a few lines of code into their website, the shopping cart will appear on the right hand side of every page. This simple innovation could be huge for ticketing sales.
So, yeah, I’m excited. Maybe even moreso because the new CEO seems deadest on cutting costs, controlling expenses and growing this company only after this new platform has been tested extensively and all the bugs worked out. It’s going to be a long journey, but I’m encouraged by news that they will be handling all the ticketing for the Columbus Zoo (while it’s just a stupid zoo, like the animals they house, these zoos move in herds, so I wouldn’t be surprised to see further customer wins). Of course, the stock probly won’t benefit unless they start getting a lot of small contracts or one big one. Financing definitely wouldn’t hurt either!
Warning: Timothy Sykes and the Easter Bunny have positions in CYGT.
10 Questions for Tim Sykes
How were the ladies and the scene out in LA? You still there or back home for turkey day?
No time for LA ladies this time around—too many meetings and projects going on…took the red eye back this morning in order to make my debut on the FOX Business Network at 6:30AM (I’ll have the video up shortly)
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Tim, the market has been so brutal lately, I’m even afraid to look at my account! I’m down 25% since the bull run reversed back in mid October. Should have shorted huh?
It’s easy to look back and say shoulda woulda coulda, but in my experience, you need to simply focus on what works for you, be comfortable with your market exposure and take your losses along with your gains. Analyze your investment decisions to death and learn to filter out what doesn’t work in order to up your chances for success over time.
What is this mumbo jumbo I’m hearing that there is a possibility fed won’t cut rates come December? Will the market go under?
It’s definitely a possibility—who knows how many people are now expecting it and pricing it in, but these are guessing games best left to the POS talking heads who earn a living by never going out on a limb in order to keep their heads talking in the media.
I know you play pennies: did you catch DLAV.PK? I don’t play pennies anymore (bad experience) but I still watch from the sidelines. How do you catch such a runner? Do you just use a screener like microcapfeed?
Outside of my CYGT.PK disaster, I don’t touch anything below $1. My DVD, PennyStocking , focuses on trading strategies for stocks between $1 and $10.
When are you going write about the CYGT exhibit and IAAPA?
I’ll be working on this over the weekend—sorry, just been a ridiculously busy week.
Tim, good call on SMRT. Took your advice and shorted Nov. 15 at about $7.35, just finished covering on Nov.21 at an average of $5.88.
Awesome, that is part of the goal for this website—as I’ve stated time and time again, I’m not that great a trader, but I do do many things right. I saw SMRT and should’ve shorted it, but I underestimated how quickly it’d fall back to its lows. This is why I’m just gonna write about everything I see and you guys hopefully will do as good as or maybe even better than me.
Tim, why do you enjoy making a fool out of yourself every time I see another video clip of yours? Do you realize you’ve ruined your future in the finance industry?
Because I could care less about credibility and being serious/businesslike. You gotta understand how many emails I’ve gotten from people who praise me for being real and getting them interested in the stock market. Like Cramer, I’m gonna do everything in my power to help show everyone that finance can be fun, interesting and not as serious as most people expect.
I also don’t care for a future in the finance industry (as it is right now). Being prohibited from discussing my life’s work/job, advertising, admitting my mistakes, saying how I really feel—these are much more important to me and I’m loving finally being able to express myself freely (my outlandish behavior is probably a result of being muzzled for nearly 5 years—maybe I should sue the SEC for emotional and mental anguish?!?!?).
I think some of the industry’s rules are utterly ridiculous (such as when my friends in the business can’t publicly comment about my book!) and these tight regulations are the direct cause for why industry outsiders know so little about how the industry works. They are also the direct cause for why the general public shows so little interest in finance/business—I was in Barnes and Noble the other day and counted the number of magazines sections for each topic—7 for Women’s Issues, 5 for Health & Beauty, 5 for Sports, 3 for Transportation and 1 for Business/Finance. Transportation has 3 times as many categories as us?!?!?!?!?!?!?!?!?
Why can I never find your book in any bookstore?
Because bookstores are horrible places to sell books—30-40% of all books are returned and the margins suck. My book is available exclusively online at all the diff. international Amazons and Barnesandnoble.com because online selling is the future as it’s much more efficient and profitable for publishers.
Where are TIM’s trades listed?
Right now, it’s just this blog, but my site will be totally revamped by January 2008 to make it much more intuitive and organized.
Tim, your book, DVD and goals in life are all incredible, you should run for president!
No, I’m apolitical. The presidential candidates remind me of the S&P 500, The Dow and The NASDAQ—too many variables at work, too many people playing diff. angles, no way to really understand what’s going on/predict who to bet on. I’ll just stick to trading and teaching people about trading….for now.
How I know I’ll Never Be A Great Trader
TIM $14,067 (up $87 on the day, $1,269 on the week)
No positions, 100% cash over the weekend
Today I proved what I have long suspected and openly talked about—I’m good at trading, but definitely not great. I’ve been following QSC and XRM, taking a $130ish loss on QSC yesterd
Day Trades Today and More Potential Plays
TIM $13,980 (down $70 on the day)
Overall market today—boring , lifeless, not worth detailing.
IAAPA /
ance.yahoo.com/q?s=cygt.pk”>CYGT —After trying out Sega’s 3D theater (which rocks!) and going on some cool rides, I got to see CYGT’s new ticketing technology firsthand. It’s amazing. Stock performance aside (barely any trading volume today), they’ve spent a year working on this new software and it shows—I’ll have a detailed post this weekend when I can attach some screenshots and pics from the expo.
CSIQ —decent pre-market strength (up 50 cents or so), no gap-up whatsoever though, early morning spike ($2!), but then a gradual fade throughout the rest of the day. The spikes are nice, but before I go long, I want the stock to show me that it can hold its gains! Still watching it, but highly doubtful I’ll do anything.
QSC —I short sold 500 shares at $4.09 right near the market open because, after opening down 10%, I thought it might crack the technically important $4 barrier and then panic selling would bring it down to the $3.50-$3.75 range, at which point I’d cover for a quick $150-$250 in profits. I was right about the stock cracking $4, but it only got down to the $3.85 range and I decided to hold for larger gains. I liked the afternoon action (stayed negative, fading trading volume), but became worried when the stock closed strongly into the close (breaking past the mid-day spike price of $4.20). Considering Friday is the worst day of the week to be short and my 7am flight back to NYC means I’ll miss the market open—I covered my 500 shares after hours at $4.35 for a nasty little $140 loss (including commissions). It’s too early to tell if this was just a fakeout to scare shorts like me, but I can’t risk an early morning spike when I’m not gonna be around to do anything about it! Tough trade, but a good exit, no matter what happens tomorrow.
SMRT —glad I didn’t short it as I was 100% right that after a pretty decent drop, there’s not much downside left right now. Still on my watchlist, but probably won’t touch it.
XRM —very nice bearish price action all day (each bounce met with selling, finished near the lows)—still have my 300 shares short from $5.82, I expect further weakness, even if the trading volume will most likely remain minimal. Ideally, I’ll buy to cover my short position in the low $5 range ($200ish profit) And, guys stop worrying about that one insider buy—you’ve been brainwashed—insider buys are usually meaningless , especially when the resulting price action increases a company’s marketcap by $50 million!
JRJC —Damn! Perfect technical crack off the resistance (former support) in the $31-$32 range, now back down to $28ish. Shoulda woulda coulda shorted 100 shares yesterday for an easy $300 profit today. Def. won’t be the last trade I miss–just a part of trading.
GSOL —Wow! I knew this company had run up on Alibaba hype and that it looked a little pricey, but I had no idea how pathetic their earnings would be! I mean c’mon—you’re a Chinese e-commerce/B2B play and your revenues are only growing around 15% annually??!?! Please, even my crappy little CYGT is growing faster than you guys! And, what’s worse, they still haven’t figured out how not to sound defensive in their PR “…management still expects revenues to be up…” Even after the drop today, this is a company trading with a forward PE of 30! Hint: only premium companies deserve premium valuations. I’d short this if I had patience, but it’s now a fundamental play and TIM doesn’t have the assets to wait for a 20-30% move that could take months to play out.
Friday’s Potential Plays—Local.com (Nasdaq: LOCM ) look interesting for a potential short (on some puffy licensing news today ), but it’s too early to take a position (this one can really run). I’ve got 2 media interviews tomorrow afternoon so my trading will be slim to non-existent. But I’m not missing much as I just spent a few hours looking for interesting plays and nothing popped up—this tends to happen in bear markets.
IAAPA Expo, Stock Picks and An American Hedge Fund Book Review
TIM $14,050 (down $28 on the day, up $1,635 or 13.17% in 9 days)
IAAPA —Spent the morning and early afternoon at this expo and I’m going back again tomorrow. I thought it’d be boring, but I underestimated those
392.jpg”>crazy bastards who work in the attractions industry—there’s rides, games and fun for everyone—if you’re in Orlando this week, come on down! (Just wait ‘til you see some pictures)
Overall Market/Economic Numbers/ News from Corporate Giants—Irrelevant! (I just love how people think they need to digest all this crap in order to trade successfully)
CSIQ —Solar play (that was in contention to be part of my Solar’s Eleven ) reported blowout earnings…managed to breakout to an all-time high (and sloppy cup and handle chart pattern) in the early afternoon, but couldn’t hold on. I thought about buying some into the close for the probable gap up, but I’m going to see a demo of CYGT’s new technology tomorrow morning, making gap up plays—especially on volatile stocks like this—too risky for my blood.
CYGT —nosed around their exhibit today—lots of Six Flags, Hershey and other people milling about (me gusto mucho). Stock showed some nice buying at 12 cents today, but the spread is ridiculous and makes me glad that I sold out TIM out at 11 cents. Probable further upside, simply because it’s so cheap and there’s so little dollar trading volume. Even though TIM is out, I, along with practically everyone else I’ve ever met still has a ton of shares so here’s to the slim chance of the comeback of the century!
QSC —biotech play continues their exponential run-up… I love it! I thought about shorting it into the close, but I don’t like shorting exponential plays until they go negative (or in this case, crack $4/share). Probable short tomorrow, but it’s gotta be confirmed by the price action first. (This blog is helping me become more disciplined!)
SMRT —textbook reversal and I reallyyyyyyy wanted to short this sucker into the close, but I procrastinated (not wanting to risk a late day bounce) and by the end of the trading day, it was already down a ton. Stock probly will fall another 50 cents pretty easily, but, it could bounce just as quickly and with my IAAPA schedule booked for tomorrow, this isn’t something I want to be in.
EDA —lack of trading volume / confirmation of breakout makes me happy I wrote this off as too boring for TIM and basically anybody with a pulse.
XRM —the one stock I took a position in today (short sold 300 shares at $5.82 right before the close). I highlighted this one yesterday as a play that I think will soon reverse. This is just a small position (12% of TIM assets) and I’m willing to add into strength, but I fully expect a drop of 50 cents or more from the current $5.88 closing price in the coming days as the stock showed particular afternoon weakness, nearly finishing negative on the day.
JRJC —incredible bounce right back to near where the old support (now resistance) sits in the $31-$32 range. Since this is a textbook bounce that will probably fail, I was thinking of shorting 100 shares to scalp it for $2-3/share to the downside—but earnings are next week and I’m expecting blowout numbers so shorting is extra-risky here. Watching form the sidelines.
DTV —has gotten crushed due to DISH’s pathetic earnings report. I’m still interested—since I still love DTV fundamentally—but I hate stocks that fakeout breakout, so I’m just watching and waiting here.
INOD —great earnings today, should continue to be strong, put on my watchlist for possible buy.
And, definitely, definitely most importantly, I just got another glowing book review from Richard Wilson, a hedge fund consultant, who calls my book a “Great read for a trader, or anyone aspiring to be a trader or start their own hedge fund…”
I’m getting a ton of emails from people who think I should focus 100% of my time on trading “to get my credibility back”—to you people, I say, “Screw you! ” As much as I want to make $1.65 million as quickly as possible, I’ve learned to live a more balanced life (somewhat) as I think it helps my trading (not to mention my sanity). So, instead of devoting 18 hours/day to the market, I’ll probably devote 15 or so—the rest of the time, I’ll be enjoying fun events (like IAAPA), writing this blog, doing any and all interviews (gotta spread the word about responsible financial speculation!), speaking (I’m available—get ready University of Arizona Investment Club!) and replying to emails. Ideally, I’ll show that you don’t have to watch the markets 24/7 since—and I really believe this—the greatest opportunities stand far above the typical market noise.
Warning: TIM has a position in XRM…Timothy Sykes and the Easter Bunny have positions in CYGT.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider some of these stocks to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility , lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
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May 15, 2008Yup, by next Monday, everything's gonna be real working-like!
May 15, 2008PDO, up $4+ today, will teach you not to randomly short strong penny stocks, get in, get out then run...cuz sometimes they squeeze stubborn shorts to death!
May 15, 2008No ideal short plays today, check out these 2 interviews while we wait for price action perfection
I wish I'd listened to my own rulebook, instead got squeezed for $400 shorting blatant-fraud KYUS too early...someone needs a refresher course this weekend!
I nailed NCOC's 20% rise today in my pre-market post, but I was too biased against buying little breakouts, learn from my mistakes!
May 15, 2008Lots and lots of new sketchy stocks to watch
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