Comments on: The Eighty Cent Dollar http://www.inelegantinvestor.com/2006/09/22/the-eighty-cent-dollar/ Something of Value Fri, 21 Nov 2008 03:41:52 +0000 http://wordpress.org/?v=2.6 By: investor http://www.inelegantinvestor.com/2006/09/22/the-eighty-cent-dollar/#comment-46 investor Tue, 10 Oct 2006 21:20:10 +0000 http://www.inelegantinvestor.com/2006/09/22/the-eighty-cent-dollar/#comment-46 Mike- I'm confused by your claim that "costs outweigh the revenues for Cadus. It will go broke in 2007 without any investments. Icahn has shown no interest in doing anything with this money. To me, and to others I know, seem to think that this company could easily go into liquidation, or bankrupcy if it waits too long." Cadus' costs are under $1MM per year, and while that outstrips revenue, revenue plus interest income has exceeded costs of late. Even if not, what number in the report makes you think that, it will run out of cash next year. I've read the same paragraph you cite, and see no reason to think that it suggests the company will burn through $24MM in cash in the next year. Look at cash levels over the last 3 years; there is no extreme downward trend. Please let me know where I am wrong. Where are the expenses changing so radically that the company will burn through all of its cash? You are correct that this story is fundamentally unchanged for the past several years. I could very well be sitting here in 2010 still waiting for something to happen. But I've got to think that as time goes on, and the cash is just sitting there, the likelyhood of something happening increases. There is no reason for this company to continue to exist. It should and I believe, likely will, liquidate and return cash to shareholders. Mike-
I’m confused by your claim that “costs outweigh the revenues for Cadus. It will go broke in 2007 without any investments. Icahn has shown no interest in doing anything with this money. To me, and to others I know, seem to think that this company could easily go into liquidation, or bankrupcy if it waits too long.”
Cadus’ costs are under $1MM per year, and while that outstrips revenue, revenue plus interest income has exceeded costs of late. Even if not, what number in the report makes you think that, it will run out of cash next year. I’ve read the same paragraph you cite, and see no reason to think that it suggests the company will burn through $24MM in cash in the next year. Look at cash levels over the last 3 years; there is no extreme downward trend. Please let me know where I am wrong. Where are the expenses changing so radically that the company will burn through all of its cash?

You are correct that this story is fundamentally unchanged for the past several years. I could very well be sitting here in 2010 still waiting for something to happen. But I’ve got to think that as time goes on, and the cash is just sitting there, the likelyhood of something happening increases. There is no reason for this company to continue to exist. It should and I believe, likely will, liquidate and return cash to shareholders.

]]> By: Mike B http://www.inelegantinvestor.com/2006/09/22/the-eighty-cent-dollar/#comment-45 Mike B Tue, 10 Oct 2006 20:35:16 +0000 http://www.inelegantinvestor.com/2006/09/22/the-eighty-cent-dollar/#comment-45 Cadus has always been interesting, this has been the same story for the past 5 years. Look at the chart. I have been watching this one as well, waiting..........as they rest of the few who have found this possibly undervalued company. However, the key points I need to make here are just as clear as the case to own shares in this article. In the 10Q, the most important stats worth mentioning is the fact that the costs outweigh the revenues for Cadus. It will go broke in 2007 without any investments. Icahn has shown no interest in doing anything with this money. To me, and to others I know, seem to think that this company could easily go into liquidation, or bankrupcy if it waits too long. If they can use the cash effectively, this can be a winner. I happen to think that since Icahn wants his Dr. director buddy of KDUS involved in the ImClone shakeup, perhaps KDUS money just may have found a home for investment. Even so, remember what is pasted below from the 10Q. LIQUIDITY AND CAPITAL RESOURCES At June 30, 2006 the Company held cash and cash equivalents of $24.2 million. The Company's working capital at June 30, 2006 was $24.5 million. The Company believes that its existing capital resources, together with interest income, will be sufficient to support its operations through the end of 2007. This forecast of the period of time through which the Company's financial resources will be adequate to support its operations is a forward-looking statement that may not prove accurate and, as such, actual results may vary. The Company's capital requirements may vary as a result of a number of factors, including the transactions, if any, arising from the Company's efforts to acquire or invest in companies and income-producing assets and the expenses of pursuing such transactions. Cadus has always been interesting, this has been the same story for the past 5 years. Look at the chart. I have been watching this one as well, waiting……….as they rest of the few who have found this possibly undervalued company.

However, the key points I need to make here are just as clear as the case to own shares in this article. In the 10Q, the most important stats worth mentioning is the fact that the costs outweigh the revenues for Cadus. It will go broke in 2007 without any investments. Icahn has shown no interest in doing anything with this money. To me, and to others I know, seem to think that this company could easily go into liquidation, or bankrupcy if it waits too long. If they can use the cash effectively, this can be a winner. I happen to think that since Icahn wants his Dr. director buddy of KDUS involved in the ImClone shakeup, perhaps KDUS money just may have found a home for investment. Even so, remember what is pasted below from the 10Q.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2006 the Company held cash and cash equivalents of $24.2 million. The Company’s working capital at June 30, 2006 was $24.5 million.

The Company believes that its existing capital resources, together with interest income, will be sufficient to support its operations through the end of 2007. This forecast of the period of time through which the Company’s financial resources will be adequate to support its operations is a forward-looking statement that may not prove accurate and, as such, actual results may vary. The Company’s capital requirements may vary as a result of a number of factors, including the transactions, if any, arising from the Company’s efforts to acquire or invest in companies and income-producing assets and the expenses of pursuing such transactions.

]]> By: TheValueBlogs » The Eighty Cent Dollar http://www.inelegantinvestor.com/2006/09/22/the-eighty-cent-dollar/#comment-26 TheValueBlogs » The Eighty Cent Dollar Thu, 05 Oct 2006 23:46:40 +0000 http://www.inelegantinvestor.com/2006/09/22/the-eighty-cent-dollar/#comment-26 [...] To continue reading click here. [...] [...] To continue reading click here. [...]

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