Code Rebel Corporation (CDRB) fell another 12% today, falling to the $20 price target I projected the day of the IPO back in May. In my article, The Curious Case of Code Rebel Soaring Stock, I wrote about the ballooning share price on little volume, and the likelihood that shares would fall back to earth, which is precisely what they have done since June 11th, when they traded at $41 after going public at $12 in May.
I just found it odd that you would have a two bagger in such a short time when the company would not talk about revenues. I talked to President Chris Sawicki at the company shortly after the article above and he explained they were in a quiet period post IPO and did not want to be quoted per internal counsel. I understand that – but keeping a lid on everything is stupid – your volume reflects the silly choices you are making.
Keep in mind that I am trying to understand how the company arrived at a $600 million dollar valuation with little information about what sales were in the pipeline, and how the industry multiple would prompt shareholders to buy stock up 200% after the first week. The company has not spoken to me, and has not responded to any attempts I have made to better understand the company for our readers. I think part of the problem is that I wrote that I thought shares were 100% overvalued at $40 per share. Perhaps this ruffled some feathers at Code Rebel…specifically the feathers of CEO Arben Kryeziu.
My response is “Get used to it” – if you want to be a public company and utilize the vehicle in 2015, you cannot sit back and hope shares go higher – you need to tell your story over and over again and have some transparency. Simply put, if you want shareholders to pay premium prices post IPO, you need to tell them something – anything.
In our conversation, Sawiki rattled off a bunch of numbers which I could have published, but I am a responsible journalist, and when a company tells me information is off the record, I respect that. That said, the fact is, the stock has done nothing but fall each day, and you would think the company would do something except sit on their hands and hope – it’s just a silly strategy.
There’s No Longer a Place for Non-Responsive Companies
So Code Rebel, I am not going away – I will be on your quarterly call, and I will be following the company each day you remain a public company – I owe it to the people who read our work. I have no other agenda, but I gotta ask…why did you go public if you intend to run silent and run deep?
In the age of social media, no company on the planet can afford to NOT talk with the press. Maybe if you go back to the days of pre-Sarbanes Oxley, when management was not held accountable and required to sign each 10-Q and 10-K. But this is a new age for small and microcap companies. You need to vault into the real world…welcome to the fish bowl.
Steve Kanaval is the author of the upcoming Equities.com's Small-Cap Throwdown, a premium newsletter designed to help investors identify the best small-cap stocks to add to your portfolio and trading ideas to profit off them. The first issue pits the hottest beverage small-cap stocks against each other to find a winner. Sign-up here for a free issue today!
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