Cyren Ltd. (NASDAQ:CYRN) Plunged on Melting Revenues

[[tagnumber 0]]Yesterday Cyren Ltd. (NASDAQ:CYRN) announced its first quarter earnings which made the share price plunge out of the trading channel. The company‘s revenues dropped and its financial condition looks desperate for there is an urgent shares offering on the way that will dilute shareholders.[[tagnumber 1]] [[tagnumber 2]][[tagnumber 3]][[tagnumber 1]] [[tagnumber 0]]CYRN closed at $2.62 for a share on Tuesday, or 16.83% down from the previous day close. The stock is quite illiquid with about 134,000 traded share on average, thus it does not take much for such a plunge to happen on some negative news from the company.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]] [[tagnumber 0]]Pre–market data shows CYRN could bounce a little bit at market open and recover some of the losses, yet both technically and fundamentally the stock looks bound to decline in the coming weeks. First quarter report show the company‘s revenue declined consequently over four quarters, reaching $7 million compared to over $8.09 million for the same quarter last year.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 12]][[tagnumber 1]] [[tagnumber 0]]Operating cash flow remains negative, which means CYRN relies on issuance of stock and debt to finance its operations. For the last quarter, working capital is insufficient to cover the operating expenses.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]] [[tagnumber 0]]Therefore, in the middle of this month CYRN said it has entered into an At the Market Offering Agreement with Craig–Hallum Capital Group LLC which will act as a sales agent entitled to a compensation of 3% of the gross proceeds. Under the agreement, CYRN may issue and sell shares of its common stock for a total offering price of $12 million, the terms suggesting the stock will be sold at market prices.[[tagnumber 1]] [[tagnumber 0]] [[tagnumber 1]] [[tagnumber 0]]As expected, CYRN shares dropped immediately on this announcement since that extremely unfavorable for the company way to raise capital sends a very negative signal to investors.[[tagnumber 1]] [[tagnumber 24]] [[tagnumber 1]]