CLST Holdings to Distribute Liquidation Proceeds to Shareholders

CLST Holdings (CLHI.PK) (formerly Cellstar) was formerly a distribution and logistical supplier to the cell phone industry. With their business under pressure, the company liquidated all of their operating assets earlier this year and is distributing the net proceeds to shareholders.

CLST was previously under investigation by the SEC, but in late June the investigation was concluded and no action was taken. CLST has no other legal issues.

When the plan of liquidation was announced, Cellstar had anticipated net proceeds to shareholders of $2.91-$3.25/share. With the liquidation wound up, CLST Holdings has revised that range to $2.91-$3.03. Shares are presently trading at $2.65-$2.70.

CLST has declared a dividend of $1.50/share payable no later than July 19th, and anticipates paying out the rest of the proceeds at an undetermined time, but likely to be later this year.

Sounds quirky? It is a bit. And a $0.21-$0.33/share profit doesn't seem like much. But assuming the rest of the proceeds are payed out on the last day of 2007, investors will earn an IRR of between 38% and 62% based on the companies projected payout range and a buy price of $2.70 today. This is largely because you will receive 55% of your cost back in a week.

Of course nothing in life is certain, including the final total payout and when it will be paid.

Disclosure: We own shares of CLST Holdings.

CLHI 1-yr chart