The global data center Cyxtera Technologies, Inc (NASDAQ: CYXT) announced that it is starting Chapter 11 proceedings. After the announcement, CYXT stock plummeted almost 60% to its all-time low. Although bankruptcy is generally a negative catalyst, the popularity of bankruptcy stock could see CYXT stock have a major run in the near term in a similar fashion to other bankruptcy plays that witnessed a dead cat bounce.
CYXT Fundamentals
Filing For Bankruptcy
Together with its lenders, CYXT determined that filing for Chapter 11 was the best option for both the company and its shareholders. Following this news, CYXT stock plummeted to an all-time low of $.0578. To continue its operations during the Chapter 11 process, CYXT received a $200 million commitment from certain term lenders to assist with ongoing operations and meet existing customer demands. It’s also worth noting that CYXT has been granted court permission to access up to $54 million of the $200 million and to continue paying its vendors and suppliers after the filing date.
Dead Cat Bounce
Bankruptcy plays are popular among investors with several stocks previously experiencing dead cat bounces after their stocks plummeted as a result of filing for bankruptcy. During COVID-19 in 2020, multiple bankrupt firms’ stocks went on 50% runs, and earlier this year, Bed Bath & Beyond (OTC: BBBYQ) went on a 175% run after reaching an all-time low of $0.05. In a similar fashion to Bed Bath & Beyond stock, CYXT stock may experience a dead cat bounce after starting its Chapter 11 proceedings.
CYXT Financials
In its Q1 2023 report, CYXT’s assets decreased 10% QoQ from $3 billion to $2.7 billion, while its cash and cash equivalents decreased 5% QoQ from $65 million to $62 million. CYXTs total liabilities slightly increased by 1% QoQ from $2.67 billion to $2.7 billion.
Revenue also increased 7% YoY from $182 million to $196 million. Operating costs increased more than 150% from $193 million to $488 million, which contributed to the operating income/loss increase of 2800% YoY from $10 million to $291 million. which amounted to a net loss of $325 million – a 692% increase YoY.
Technical Analysis
CXT stock’s trend is bearish with the stock trading in a downward channel. Looking at the indicators, the stock is trading below the 200, 50, and 21 MAs which are bearish indications. Meanwhile, the RSI is oversold at 16 and the MACD is approaching a bullish crossover. It is also worth noting that accumulation recently witnessed an uptick which indicates that there is buying pressure at the moment.
As for the fundamentals, CYXT stock just witnessed a catalyst in CYXT starting Chapter 11 proceedings which has seen the stock reach its all-time low at $0.0578. The current PPS may prove to be a good entry point ahead of a dead cat bounce.
CYXT Forecast
With CYXT starting its Chapter 11 proceedings, CYXT stock may see itself on a short-term run in a similar fashion to Bed Bath & Beyond stock. While bankruptcy is generally a bad thing, the popularity of bankruptcy plays could signal a major run for CYXT in the near term.
CYXT Fundamentals
Filing For Bankruptcy
Together with its lenders, CYXT determined that filing for Chapter 11 was the best option for both the company and its shareholders. Following this news, CYXT stock plummeted to an all-time low of $.0578. To continue its operations during the Chapter 11 process, CYXT received a $200 million commitment from certain term lenders to assist with ongoing operations and meet existing customer demands. It’s also worth noting that CYXT has been granted court permission to access up to $54 million of the $200 million and to continue paying its vendors and suppliers after the filing date.
Dead Cat Bounce
Bankruptcy plays are popular among investors with several stocks previously experiencing dead cat bounces after their stocks plummeted as a result of filing for bankruptcy. During COVID-19 in 2020, multiple bankrupt firms’ stocks went on 50% runs, and earlier this year, Bed Bath & Beyond (OTC: BBBYQ) went on a 175% run after reaching an all-time low of $0.05. In a similar fashion to Bed Bath & Beyond stock, CYXT stock may experience a dead cat bounce after starting its Chapter 11 proceedings.
CYXT Financials
In its Q1 2023 report, CYXT’s assets decreased 10% QoQ from $3 billion to $2.7 billion, while its cash and cash equivalents decreased 5% QoQ from $65 million to $62 million. CYXTs total liabilities slightly increased by 1% QoQ from $2.67 billion to $2.7 billion.
Revenue also increased 7% YoY from $182 million to $196 million. Operating costs increased more than 150% from $193 million to $488 million, which contributed to the operating income/loss increase of 2800% YoY from $10 million to $291 million. which amounted to a net loss of $325 million – a 692% increase YoY.
Technical Analysis
CXT stock’s trend is bearish with the stock trading in a downward channel. Looking at the indicators, the stock is trading below the 200, 50, and 21 MAs which are bearish indications. Meanwhile, the RSI is oversold at 16 and the MACD is approaching a bullish crossover. It is also worth noting that accumulation recently witnessed an uptick which indicates that there is buying pressure at the moment.
As for the fundamentals, CYXT stock just witnessed a catalyst in CYXT starting Chapter 11 proceedings which has seen the stock reach its all-time low at $0.0578. The current PPS may prove to be a good entry point ahead of a dead cat bounce.
CYXT Forecast
With CYXT starting its Chapter 11 proceedings, CYXT stock may see itself on a short-term run in a similar fashion to Bed Bath & Beyond stock. While bankruptcy is generally a bad thing, the popularity of bankruptcy plays could signal a major run for CYXT in the near term.