CYBN investment - asking for opinion

[manuel bon]

I put some money into Cybin, a Canadian company that uses psychedelics for mental disorders. I am giving it a go since imo psychedelics will have a great impact in the future. 

Has anyone invested in this company? What do you think about it?

[Forestluv]

2 hours ago, manuel bon said:

I put some money into Cybin, a Canadian company that uses psychedelics for mental disorders. I am giving it a go since imo psychedelics will have a great impact in the future. 

Has anyone invested in this company? What do you think about it?

I've invested in various companies developing psychedelics for mental disorders. I also think they will have a great impact on the future. . . Yet that was the only factor I was considering and assumed that would lead to growth of the company. . . And I lost A LOT of money. . . There are other major factors impacting company success and stock price. Examples include: how much cash on hand do they have? what is their cash burn? what is their debt level? . . . For example, a company low on cash cannot continue funding their clinical trials. They generally do an "ATM", in which they create/sell additional shares (also known as "dilution"). Diluting their stock puts strong downward pressure on the stock price and short sellers rush in and start selling "borrowed" shares. Stock price then significantly falls.

There are also other factors, such as the skill of the CEO, partnerships, macro-economics, interest rates, etc.

Choosing an individual company increases both risk and potential reward. If someone wanted less risk and wanted to invest in psychedelic research 'in general', they may want to look at an aggregate fund. Such a fund inlcudes lots of different companies within the psychedelic space. So, if one company bombs, the fund would decrease just a bit - it would bomb. Similarly, if one company has a major breakthrough, the fund would increase a bit - yet wouldn't skyrocket.  

Edited August 16, 2024 by Forestluv

[Michael569]

Speculative investment purely based on attractiveness of the product in the present moment can be tricky and future yield are never guaranteed even of the company's profit rises. The success of a single company may attract other investors meaning you will earn a bit of money in the short term because you already own some stock and that will rise but in the long term buying more stocks may become more expensive as the interest grows and further profit is likely to be reduced...but maybe not... it's really hard to tell.

If the company offers bonds rather than stock ownership that could be an attractive option if they have solid cash flow reserves and good management and are unlikely to go bankrupt in next 10 years.

It will be a great experience for you one way or another. Hope you haven't put more money than you can spend into it tho. 

It's usually a good idea to diversify the risk then you're not putting all your eggs into one basket although this way a more aggressive investor would be losing money where a conservative one gets to sleep better at night 

Hope it'll go well for you 👍🏻

Edited August 18, 2024 by Michael569

[manuel bon]

@Forestluv @Michael569 thank you for the good advices!