Given that there are more cash charges coming, could we see cash slip to $55 million? We're approaching 15 million shares. That's around $3.65, way down from just 2 years ago. I see no chance, given current market conditions, that a turnaround is possible...ever. PDI should just put itself up for bid, take $8 if it's available, and call it a day.
Of course, that won't happen. Will just continue to run it down to zero.
Obviously, they are going to lose a substantial amount more in 2014. All told, they've lost $70 million since 2006, which equates to around $4.65 a share. I have seen development stage companies lose this sort of money, but they are in pursuit of a home run drug or test. I have never seen a company bleed money in such an aimless sort of way as PDII.
I don't disagree with the idea that they should pursue a niche market such as molecular diagnostics. However, this no real evidence that there's going to be much demand, since successful MD companies are likely to be acquired before they would actually need PDII's services.
The prudent thing, as I've said for at least 5 years now, is for PDII to either sell itself or sell assets and distribute cash. When I first made this claim, back in 2007, investors probably would have realized $10 a share. Now...
Wow, I speculated that cash could slip from $57 million to $55 million. PDII topped it (or bottomed it) at $52.7 million!
So, from 2006, PDII has lost a whopping $62 million of a giant cash hoard. That's more than $4 a share. They should have sold what assets they could in 2006 and distributed the $8 plus in cash. Or, they could have shuttered the business and bought gold.
The debacle that is PDII hasn't been a surprise to me. This is a business with too many competitors, of which PDII is the smallest. It had and has no business continuing on as an independent company, although I doubt anyone would buy it for more than $7 at this point, and even that would be generous.
2006 cash per share: $8.21
2012 cash per share: $3.81
The 2012 figure is for cash of $57 million. The actual figure could be lower. So, we've dropped a whopping $4.40 cents a share in 6 years. We've averaged a loss of 73 cents a year for six year, more than 6 cents a month, every month for 6 years!
Sad to say, that money is gone forever. There is no way this will ever become more than a breakeven business. It could continue to be a loss-making one.
The BOD has quietly watched this implosion, and done nothing. NL will eventually be canned, and replaced by another tired pharma exec, who will again be given a handsome comp package.
Dugan's the one who will suffer the most (assuming he still has a large stake). He doesn't seem to care. He's quite happy to allow his life's work and his fortune just slip away. Sad but true.