The Curious Case of Software Maker Code Rebel (CDRB) Soaring Stock

Steve Kanaval |

This is a re-post of an article from May 2015...

I was revisiting Code Rebel (CDRB) who has not traded a share since the regulators showed up and the rats ran down the rope to shore. But a look back tells a scary story about dishonest public company participants.

We identified this for what it was at the outset...

"This stock will NOT be at $35 as we emerge from the first reporting quarter. They will be lucky to be above $20. They look to be more than 100% overvalued."

" If you read the chat rooms, it looks like a pump and dump, but for me, I have zero conclusive evidence of anything at all...just a cold social media trail."

An article from May of 2016...see original article below

CodeRebel (CDRB) Going Down in Flames

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By Steve Kanaval |

If you are going to call yourself Code Rebel (CDRB), it is clear you intend to act outside the norm, and rather than make a splash on your IPO day, you quietly introduce your company, raise a small amount of money, base your operation on an island, do not talk to anyone in the media and call yourself a rebel. If you do this, your stock price may explode!

I have been on the trail of CDRB and was thinking maybe they should have chosen the symbol CBGB instead because they are totally old school. They became public like a company from 1970. I’ve called everyone at this company, sent Facebook friend invites, pinged the IR guy and CEO on Linkedin, taken a selfie and sent it to the underwriter requesting information following normal journalistic protocol, and I get back a big zero. Zip. How can a company who writes software code to solve communications issues between Mac and Windows skip marketing during IPO week? It can only be intentional. What sheer genius.

The only thing that happens with this stock is it goes higher and no one knows why.

I checked the filings for this Hawaiian software company to see who the shareholders are and I get nothing.Zero.Zip.

If you read the chat rooms, it looks like a pump and dump, but for me, I have zero conclusive evidence of anything at all...just a cold social media trail.

I think I would fail as a gumshoe, but if someone from the company would please reach out and talk to someone, you have so many ways to communicate, and isn’t this what you do as part of the business plan.

Much of the reason for the rally is the small amount of shares issued in the IPO—a total of 1,000,983 shares of common stock at $5 per share, raising $5,004,915 in gross proceeds. Code Rebel intends to use the net proceeds of this offering primarily to expand and increase its marketing efforts, hire additional technical and marketing personnel and build its infrastructure—how ironic.

CDRB.jpg

What does this say about information flow? What it says to me is—less is more—if you are following all the rules, and Code Rebel personifies this in its recent pricing the of stock, issued at $5 and opened at $12 on May 19th. In 72 hours, it traded to $39, so it’s up 300% in three days on light volume for an IPO -averaging 200,000 shares per day, bumping company valuation to near a billion.

In the days of over-hyped social media, this highlights what happens if you adroitly feed a small amount of information with a tight-fisted float (shares outstanding) into a system expecting a dearth of information. What you get is an explosion in price. I can tell you that at a $1B valuation, Code Rebel is setting up to be a core portfolio short position, and there is some hedge fund hot shot licking his/her chops just waiting to get a borrow so they can initiate a short. This stock will NOT be at $35 as we emerge from the first reporting quarter. They will be lucky to be above $20. They look to be more than 100% overvalued.

So Code Rebel IR, can you call me. I do not have an agenda other than to pass accurate information and would like to get a sniff of the business plan and some 2015 guidance. Please call me, don’t leave me here like this with no information. It’s not fair, I am a responsible journalist.

Read previous articles on Code Rebel

The Curious Case of Software Maker Code Rebel Soaring Stock

Code Rebel: The Revolution Will Not Be Televised

Code Rebel Runs Silent, Runs Deep

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CDRB Code Rebel Corp n/a n/a n/a n/a

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