AFFY Royalty Trust Theory = Lipstick on the Bankrupt AFFY Pig
When faced with the reality that AFFY has (1) terminated all its employees, (2) closed its offices, (3) scheduled the auction of all of its tangible property, (4) has no revenues (5) disclosed liabilities exceed assets, (6) disclosed approx $5M "free" cash as of March 31, (7) disclosed pending securities class actions (8) disclosed pending shareholder derivitave actions (9) disclosed that it anticipates products liability claims to be filed, (10) disclosed that its insurance may be denied or prove inadequate to cover litigaion expenses and liabilities and (11) disclosed that it has hired The Brenner Group, whose primary specialty is guiding technology companies through Chapter 11 reorganization, what is a long pumper to do?
I'll tell you what the long pumpers do in this situation: (1) deny reality, (2) call the wind down of operations leading toward Chapter 11 reorganization, the transformation of AFFY to a ROYALTY TRUST. Bottom line: AFFY long pumpers put lipstick on the AFFY bankrupt pig as part of Operation AFFY Retail Bagholders.
I would say Laffystock would be fairly valued if the market cap were about $10 million. That would be about right for the 80% BK and 1% turnaround and 19% buy-out around $10-15 million.
However, at $50 million market cap, this is ridiculously over priced. There are many going concerns with a full work force and pipeline that are under $100 million. Very many. $50 million would have been about right IF Killer Drug O was not recalled. The market, frankly, was never realistically very high versus Amgen drugs. And the do-nothing employees did not help. $50 million was about right before Deaths. Now, it is Laffable.