Well, since this message board is basically dead (currently, (IMHO) until we finally hear news that will facilitate CDZI's ultimate and, totally unavoidable, demise (= to reach a share price of $0)), I thought that I would like to share tonight some nice quote from a world-famous poet (which, of course, no one in the US has ever heard of (US ranks about 17th in the world in recent education rankings (example: Louisiana (which ranks way, way below 17th in the world) Louisiana teaches students, funded by tax payer money, I'm not kidding on this, that the "proof of the existence of the Loch Ness Monster is proof that humans and dinosaurs co-existed, and that the earth is a couple of thousands of years old and this, apparently, proves that the "Theory of Evolution", proposed by a weird guy named "Charles Darwin" is wrong". If you have any education (and, if you are from the US, specifically, if you're from Louisiana, this is increasingly unlikely, please redirect complaints to wasting education tax dollars to Louisiana's great GOP leader, and likely next President, Bobby Jindal) . I know exactly what you're thinking right now, that I'm totally nuts. Well, unfortunately, if you do a google search with the simple keywords "Louisiana, Loch Ness Monster, Evolution, and Education" you would realize that this is, sadly, true! Anyway I will give you the quote using this "weird and ancient language that seems to fit this corporate entity, Cadiz. Inc., so well ("What is the nature of the entity "Cadiz Inc".: "Von Zeit zu Zeit seh ich den Alten gern, und hüte mich, mit ihm zu brechen es ist gar hübsch von einem großen Herrn so menschlich mit dem Teufel selbst zu sprechen")
I think the majority holders had to step up and pick up those shares, simply because they don't have another choice. Had they refused to do so, the share price could potentially have totally plummeted. Those managers have been holding shares of this company for years and have been losing their investor's/companies money for a long time. In 2007 CDZI's stock was traded for around $27! Since then, CDZI has lost more than 80% of its share price. If they bailed now, the responsible funds managers would have some serious explaining to do, as to why they waited all those years and watched the company and stock decline! It's the classical case of throwing good money after bad...
As weird as it may sound, I actually think that, albeit risky, it might be a good time to maybe consider betting on a short-term rebound of CDZI, which could happen in response to the announcement of some additional (or all) dismissed lawsuits. Dismissal of all lawsuits could be perceived to somewhat reduce the level of uncertainty associated with this project. I actually find my own statement somewhat shocking because it is the first time (I believe) I have actually made any positive point in association with Cadiz Inc. (note that this only relates to the short-term share price of Cadiz, not the project itself, which I think is totally wrong and not viable!). But I think the heavy sell-off (I explained my opinion about it above) is due to mainly technical/rule reasons, and is likely to abate soon.
Fundamentally, I'm absolutely convinced that eventually, someone is going to ax this project and that the share price is going to go to $0+\epsilon share price.
My most likely scenario is still that this will be caused in response to a decision by the board of directors of the MWD, and be influenced by/related to the (likely) introduction of an MCL for Chromium 6 in California (which I expect around August 2013). I don't think the MWD will allow water in their aqueduct that has a Chromium 6 levels an order of magnitude above what I believe the final MCL will require. The second most likely scenario that I can imagine is that eventually, the BLM, will require a NEPA review. This will not necessarily kill the project, but will (IMHO) wipe out common.
Disclaimer: I was never (at no point) short CDZI, and I was only long once (regrettably, for a very short time during last year's pump-and-dump, at a price of ~$10). Shortly after that time, I recovered my losses (and actually turned a profit) by buying and later selling $10 puts. I will never go long CDZI again. I do not currently own any CDZI options, and I will never buy/sell CDZI options again.
Well, that was a terrible month for Cadiz Inc's share price. I'm actually (almost) starting to feel bad for Cadiz.
A couple of facts:
* In June, Cadiz Inc.'s stock price declined by almost 35%. The decline is around 45% for the year.
* The short interest is at an (at least) 52 week high (possibly multi-year) high. As of 6/14/2013, the short interest was at 1,540,584, that's up 30% from the recent low in April.
* The share dropped below the so important $5 level, which is clearly a "sell" sign for many mutual funds (simply because of internally imposed rules).
* CDZI was removed from the Nasdaq OMX Water Index which, by the way, I don't think has anything to do with the $5 level (since the decision was made before they fell below $5, and, since this is a decision the Nasdaq only makes once a year, it likely goes back a while).
The last point (OMX Index) has probably contributed to falling below $5, and that, in turn, has apparently led to a cross the board, heavy sell-off among (some) index funds and many mutual funds. You could clearly see this looking at the heavy, and very unusual volume over the past two weeks (check out today's volume!). Note that not all index funds are tracking the Nasdaq OMX water index, so there will still be index fund holdings for funds that track the more general Nasdaq index.
Another bad news for longs is that the "departure" of mutual and index funds. Specifically index funds (who have no choice but to buy a stock that's part of a specific index) have contributed to the market activity in CDZI in the past. I expect the overall volume go down way below where it used to be.
I see only one possible positive development for CDZI shareholders: I do not believe that the lawsuits against Cadiz Inc. will be successful. Most of them seem to be rather based on "procedural merrits" that I don't believe have a chance to succeed. I think the best shot at winning a lawsuit is the one by Tetra Technologiies, Inc.
Among the mutual funds major holders, there are a number of index funds:
iShares Russell 2000 Index Fund, Powershares Exhg Traded Fd Pwrshs Nasdaq OMX U.S. Water, Vanguard Total Stock Market Index Fund, First Tr Exchange Traded Fd-First Tr ISE Water Index Fund, Vanguard Extended Market Index Fund, iShares Russell 2000 Growth Index Fund.
Their combined holding is around 1,000,000 shares. If you sum up the shares sold since June 14 (the day the NASDAQ OMX Us Water Index change was announced, and specifically consider yesterdays 500,000+ selloff, you approximately get to 1,000,000....
Last week, the NASDAQ OMX Group, Inc. announced changes to the NASDAQ OMX US Water Index. After their annual evaluation, they decided to add two water companies: Connecticut Water Service, Inc. and Roper Industries, Inc., and remove one water company: (surprise!) Cadiz Inc.
The Cadiz short interest has bounced back to almost record level. It was at 1,426,561 as of 5/31/2013, up by almost 250,000 compared to April. That's a pretty significant move.
The stock has been trying to stay above $5 (trying to prevent it from becoming (according to one common definition) a "Penny Stock"). Stocks that fall below $5, often show an accelerated downward dynamic due to mutual funds reducing (or abandoning) their positions. But it looks as though it may now have began its final (and inevitable) descent to $0.
There also appears to be more and more criticism within the San Bernardino County against the increasing bill for their Sacramento law firm, Downey Brand LLP they have to foot (They are now at around $1.5M). And they still have 9 lawsuits to go...
Another piece of information: The short interest in CDZI had actually steadily declined from the recent peak of 1,454,735 (on 11/30/2012) all the way down to 1,182,158 (4/15/2013). Now, for the first time since November 2011, the short interest has increased again (by 81,739) to 1,263,897 (4/30/2013).
Nice! I'm not surprised there is no official Cadiz Inc. press release to accompany this beauty of a 10-Q!
Here is the (sad) summary of where they are right now:
Total shareholder's deficit for the 3 months ended March 31,2013: $23,770,000 (up from $16,768,000 three months ago)
Burned through $7,439,000 during those three months.
Revenues during those three months: $4,000 (hmm... if corporations were people (M. Romney), this looks like below federal minimum wage?)
Quote from the 10-Q: "The Company is currently named as a real party in interest in eight (8) lawsuits related to the Water Project..." "The eight lawsuits have been brought by four plaintiffs and have been coordinated in Orange County Superior Court"
Summary: Any delays/uncertainties caused by negative news from ANY of the 8 lawsuits, announcements of a new MCL for Chromium-6 in California (supposed to be decided on by the end of this summer), or any other federal (oversight) action in this case could easily wipe out common...
actually, I have a (partial) answer to my own question. Based on a December 16, 2011 press release, Water Asset Management, LLC. purchased an additional 500,000 shares at a price of (I calculated that from the total amount released) $9. That means that just on that portion of their investment, they lost 1,940,000 since December 2011... But of course this just accounts for the loss based on 500,000 of the 1,237,890 total shares that they own.
Btw: once it drops below $5 (one commonly used definition of a "penny stock"), and it looks as if this is a likely scenario, there is a good chance that those mutual fund and bank bagholders will start dumping their shares (specifically the smaller ones, like Water Asset Management, LLC. and Zesiger). In fact, that must have been a really bad year for Water Asset Management LLC. They only have an estimated $316M under management and are heavily invested in this pearl. I'm not sure when they started buying CDZI shares, but they must have lost big time on this one...
Here is a list of all those looser investment companies that are all completely underwater with their CDZI investment:
Zesiger Capital Group LLC 9.99%
Water Asset Management LLC 8.01%
Odey Asset Management Group Ltd 6.47%
Robeco Investment Management, Inc. 5.62%
Hambro (J.O.) Investment Management Limited 2.71%
Credit Suisse 2.69%
Vanguard Group, Inc. (The) 2.33%
Altima Partners LLP 10.18%
BlackRock Fund Advisors 1.91%
State Street Corporation 1.48%
CDZI's chart pattern looks pretty impressive (resembles the free fall kinematics equations from physics)... It is now converging more quickly to fair value ($0 IMHO). The share price has dropped around 20% this month, and almost 40% for the year. The accelerated sell-off seems to be related to the fact that the secured lenders appear to be getting ready to walk away with the loot (i.e., recent refi deal and Board changes). It appears as if current share holders are starting to catch up with reality...
I'm also still looking forward to the announcement of California's final MCL for Chromium-6, which will likely show that Cadiz's water impressively exceeds the MCL, and is among the most contaminated water sources in California. This, in turn, will put CDZI at a significant disadvantage in negotiating with the MWD and, ultimately, make the MWD deal very difficult. Also, I'm waiting for a response to D. Feinstein's inquiry to the Interior Secretary, and also news on the various pending lawsuits.
Overall, lots of potential for upcoming bad news for CDZI. My prediction (in the absence of significant news) is a share price of around $3.75-$4.00 by July.
I think Scott S. Slater should give himself a bonus while he still can. Hey, they still have good ol' Mr. Murray Hunter Hutchison , 74, Chairman of Compensation Committee; Cadiz Inc. may be an empty shell with almost no employees, but at least they have a "Chairmen of Compensation Committee"!
And the market rewards it! If they close at the level they're trading at right now, they will close below the lowest point in 2009, namely at $5.94 on May 11, 2009.
Great News! Cadiz Inc. has a new member of the Board of Directors. He has "significant corporate management experience" and "he currently also sits on the board of directors of two additional publicly traded companies, Great American Group [OTCBB: GAMR] and Strasbaugh [OTC: STRB]" (quote official press release).
A little research into those two "additional" companies reveals the following:
Great American Group, Inc. (GAMR) -OTC BB Share price (4/15/2013): $0.44 (down 10.20% today) and the corpse of Strasbaugh (STRB) was last listed as share price $0.07 (in fact, the last trading day appears to have been March 7, where it "experienced" a price change of $.59 (-89.39%)
Does anyone see a pattern here? Cadiz get a new Director who appears to be "specialized on" (or maybe a magnet for?) bankrupt companies...
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...
Ackman lost around $140,000,000 today on JCP and around $60,000,000. That's around $200,000,000 for the day. Really not such a big deal...
Wow, that was an informative "opinion piece" by Mr. Tom Shaughnessy today. It almost caused a tiny little baby rally (triggered by people who know even less than Mr. Shaughnessy). Mr Shaughnessy appears to have essentially formed his opinion on Cadiz Inc. (more or less solely) based on the invaluable information that the Cadiz Inc. website provides. The way he dismissed (or not mentioned) the various serious risks this company is facing (legal challenges, regulatory process uncertainties, cancer causing hexavalent chromium, etc.), in my humble opinion, makes him the perfect future PR manager of Cadiz Inc (should they have money to pay him, that is...)