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Cadiz Inc. Message Board

  • xds58 xds58 Mar 5, 2013 3:10 PM Flag

    CDZI debt refi

    So I think the lenders didn't have much choice on this one - weren't going to be made whole in bankruptcy. But they moved the conversion price from $35 to $8 and the interest rate is a bit higher. Would be about 6.6 million new shares if fully converted (53/8), putting the effective share count at around 21 mil. Interest rate higher also, but deferred. All in all about as a deal as I think CDZI could have expected.

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    • Yes, there was a lot of excitement after the great news a couple of days ago. It is very exciting that CDZI managed to postpone the date as of which the common stock will inevitably be wiped out! Why did this not trigger a more pronounced and continued rally? Simply because anyone following this company was expecting it!

      Of course, this was not surprising since the lenders of this company have way too much at stake (probably their individual jobs too). After a history of years of abandoning every single principle of due diligence and cost/benefit analysis, they can't simply walk away and kill the thing right away. Btw: that was the same reason why so many big investors were still surprised by MF Global's final demise. They weren't willing to sell low and still believed all of the BS John Corzine was telling!

      Still, there is a very simple fact: pretty much every single investor in common stock who has ever invested in this company will be at a (significant) loss right now. Plus: every single negative event (random examples: MWD not accepting cancer causing water being injected into their districts, railroad right of way issues being federally reviewed, lawsuit by the company ( that is actually a real company with real revenues) and sued CDZI over messing up water levels near their long established facility may succeed, various other national park-related lawsuits may succeed, MWD imposing extremely expensive treatment of water, State of California introducing a new MCL for hexavalent chromium in drinking water, Senator Feinstein just continuing to be awesome, etc., etc) may and will cause a significant drop in common share price. This will most certainly facilitate CDZI's final convergence to share price $0 and pink sheets.

      Summary: I think this is one of the most overvalued stocks in the US stock marked with almost no ability to significantly rise but with almost certainly to decline significantly...

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