CybAero: Skeletons falling out

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CybAero made headlines. A week ago, March 19th, the Swedish newspaper Svenska Dagbladet, SvD had a front-page story about CybAero. The angel was that the company covered shortcomings in a naval test of its drones. Instead, CybAero issued a press release telling that the test was a success – and the share went up 14 %. This happened in May 2016.

SvD has had access to the report written in July by the Swedish navy after the tests. It paints a very different picture. Of seven targets, CybAeros drone passes only three. Furthermore, the reports list a number of problems: pilot loses contact with the drone, inaccuracies on the position of the drone, too slow preheating of the engine, problem with the power supply, the drone only fly at half the promised speed, and a 50 % error rate on the harpoon anchoring the drone to the deck of the ship when landing. Michael Hult, the CEO in May 2016, says the navy has cleared press release.

This of course generates another story on the 20th with the navy denying having anything to with press releases send by private companies. Next follow up is on Friday 23th, which brings nothing new but merely expresses the opinion of the Swedish Shareholders’ Association. They call for sanctions on companies with CybAero-like behaviour. Question is if there are more skeletons ready to fall out.

Forums and blogs

Besides the newspaper writings from SvD, a number of blog posts have asked questions the true number of sold drones. Also the number of crash landings. There seems to be a mismatch between the export permits obtained by CybAero and the sold systems. One forum member have written a long list of critical questions SvD ought to ask CybAero and left a copy on Avanzas Placera forum.

CybAero on deep water

Latest events clearly shows a company in deep trouble. CybAero itself have postponed the year-end report due on March 15th. Instead, it will arrive later this week, the 30th . (Which is why I used the front of the latest report above.) Furthermore is CybAero out of cash. Dubai-based Brackenor made an agreement in July 2017 to finance the company, but they pulled out in February. In December 2017 CybAero made a partly successful preferential rights issue, where I sad to say went along. This money clearly didn’t last more than a month og two. In late January the company found a new CEO – he stopped after five or six weeks. In all it draws a picture of a company in deep troubles.

In earlier posts, I have written that I count my investment in CybAero lost. Trading has been on halt since Mid-February, frozen at 1.46 SEK. I also have a number of warrants, with which I in September can subscribe for shares at 5.50 SEK. I strongly doubt this will happen.

When I bought my first shares, the price was well above 200 SEK – when counting the reverse split of 10:1 in September 2017. In December, the issue price war 3.75 for one share and one warrant.

The year-end report and the next days will show if more skeletons, or this was it. If CybAero survives, a new CEO has will have a hard time. These news stories doesn’t make it easier to find investors ready to save the company.

1 thought on “CybAero: Skeletons falling out

  1. Pingback: CybAero in the clear? | Swedish growth shares

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