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Cadiz Inc. Message Board

  • xds58 xds58 Nov 10, 2012 9:48 AM Flag

    10-Q out

    pretty lousy quarter even by CDZI standards, with G&A up, qtr end cash just above $1 mil, and current liabilities up. Even with the $5 mil additional funding, they are in a tight liquidity position.

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    • XDS58:

      Don't forget - the 10Q states that their working capital stood at a minus / deficit of $ 2.2 million as of the end of the quarter, Q3-2012. No doubt the $ 5 million they just got from Lampe Convay, their existing secured lender, they should be able to get to the end of this quarter. The 10Q also states that they will have consumed their working capital by the end of next month, December 2012. Looking at the 10Q from last year's Q3, and other 10Q's - they have never found themselves to be in a deficit on working capital. Now they do.

      Then what ??

      They need working capital in the form of new equity sales to existing or new shareholders. No doubt, they have already tried that routing - but were clearly turned down - thus the trip to the lenders for more money.

      Anyway you look at it, that is one truly messed up balance sheet.

      Sentiment: Strong Sell

    • Well, look at the different data points available for CDZI. The short interest had actually decreased by around 70,000 between the recent peak (reported) on 9/14 and 10/15, but is up again by around 40,000 (as of 10/31).

      The technical indicators are really looking bad and (IMHO) I see this heading to $6 in the very near future. I can not think of any potential "single surprise event" that could really lift this stock significantly because of all those many remaining unknown factors and liabilities and numerous pending lawsuits.

      Of course, you could see some "Cadiz Inc. secured funding for approved Cadiz Water Project" news. But even in this case, you would likely find too many conditions attached to this deal to convince investors.

      Another (maybe more subtle point) is that many stocks like this (at least the ones that appear to have some greater than zero probability of potential future success) have sort of a tendency to attract a crowd of pumpers on message boards like this one. The sort of crowd who would say ridiculous things like "this is a certain 3 bagger" (Example: Quote: ["debbie165448: If I'm right though, its a 3 bagger and you are taking very asymmetrical risks if you're short"]) Now why would this particular individual say a thing like this? Well, she thought that CDZI could be worth so much more in the future by implementing the "water storage" component of CDZI's original (failed) proposal. Now, the problem with this sort of reasoning is that one of the single biggest differences between the previous (failed) attempt at implementing the "Cadiz Water Storage and Conservation Project" and the current attempt at implementing the "Cadiz Water Storage and (no Storage component whatsoever) Project" was dropping the "Storage" component of this project. Was that because CDZI was afraid of "getting too rich too soon?" Debbie would argue that this was an "ingenious" decision because, hmm, I don't know.

      This board really has only this "Debbie" character as a "pumper" right now, who has been trying to pump the stock. In fact, when she made her first post (recently), I thought she was trying to be sort of ironic and would just repeat shallow and easily refutable CDZI corporate talking points, thus pointing out that this whole project is very unlikely to succeed. I would have actually considered that a pretty cool approach. It turned out that this was not the case and she actually believes the stuff she was posting.

      • 1 Reply to fudre71
      • I think CDZI could easily be a triple - from a base of 5 cents you might see some short covering to drive it to 15 cents from guys that don't want to bother waiting around for Chapter 11. I think the existing debt will likely ultimately convert to equity, wiping out existing shareholders. At least management would be able to reload on options and restart the proposal in another decade or so.

        Sentiment: Strong Sell

    • These guys have a bit of a catch 22 on financing - they prob. can't get MWD approval without a treatment facility, but they have no clear way to finance that. I also think going to be tough to get through legal issues by Nov 2013 debt maturity, but maybe lenders extend again since they're not going to get paid much by pushing into chap 7 -

      Also, on the recent press release that Fed. courts had dismissed suit on merit - this was kind of along the lines of the 'project approved' release - perhaps even more misleading, since the suit was withdrawn without prejudice and can be re-filed.

 
CDZI
10.56+0.36(+3.53%)Sep 29 4:00 PMEDT

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