Gediminas Jasionis

Bad Times Not Yet In The Past For CSMG Technologies, Inc. (PinkSheets: CTGI)

by Gediminas Jasionis September 24, 2009
80logo.jpgCSMG Technologies, Inc. (PinkSheets: CTGI or CTGI.PK) has become the stock you want to keep away from. Apart from being illiquid and moving on no particular reason the stock was further doomed by recent letter to shareholders.

These letters are usually cautious about how they disclose things however this one was particularly negative. Basically the company's management admitted they are unable to operate due to assets being frozen on court's decision. Layoffs and closing of Santa Barbara Office followed the shortage of cash.

It seems the management has given up. Even the motivational part of the letter doesn't sound convincing. It is unlikely the company would be able to recover under current conditions. With no revenues planned for the remainder of the year and only some assets in possibly in play this business is either going to go through restructure or be acquired by some entity in need of public shell.

What's really strange is why the company still trades above the $0.10 per share. CSMG hasn't been reporting their financials since late 2008 and with legal issues preventing them from moving forward they have to count on funds from board members even to survive this troublesome period.

With such a troubled outlook the share price is likely to drop significantly, which will further burden the company's ability to raise funds even if they manage to deal with current issues.

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