Seeking Alpha

shortyourdreams'  Instablog

shortyourdreams
Send Message
Love to short companies worthy of bankruptcy death.
  • CDZI, The Best Short Ever? 1 comment
    Jul 19, 2012 11:25 AM | about stocks: CDZI

    First, the finances:

    • $100 million market cap
    • $58 million in debt ALL DUE JUNE 23, 2013
    • $42 million in Mojave Desert, marked on the books at $1,000 per acre
    • Negative Income
    • Negative Cash Flow
    • Negative Equity
    • Revenue Collapsed from $100 million annually in 2002 to $600,000 annually today

    Now, the valuations:

    • P/E Impossible
    • P/CF/ Impossible
    • P/B Impossible
    • P/S 170 (Market average: 1)

    Now, some goodies

    • Company is trying to sell $50 million worth of stock into a $100 million market cap so 50% dilution, a 33% loss in the value of shares
    • Company is also trying to revive an already cancelled project to save itself, the Cadiz Valley Water Project

    The best part about the Cadiz Valley Water Project is that it's dependent upon using the Colorado River Aqueduct. The CRA is under the authority of the Metropolitan Water District of Southern California. The MWD rejected this project in 2002, and board members have stated they will do so again.

    All the while, CDZI is trying to sell this project to the sub-districts around southern California, namely Santa Margarita Water District. Of course, these sub-districts are anxious to get the deal done since they think they can prenegotiate these lower promised rates with CDZI even though the water will be bought from the MWD since the water is supposed to be dumped into the CRA and then pumped to the sub-districts in the same way it is now.

    The MWD will reject this boondoggle again like they have in the past since they will never sell to the sub-districts at much lower rates based solely upon the promises of CDZI, a nearly bankrupt company.

    All these parlor tricks do is delay the most likely outcome near June 23, 2013: bankruptcy.

    I nominate CDZI as the best short ever.

    Disclosure: I am short CDZI.

    Additional disclosure: I'm long puts on this sucker until it either goes bankrupt, or someone bails them out.

Back To shortyourdreams' Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (1)
Track new comments
  • L.C.
    , contributor
    Comment (1) | Send Message
     
    With huge overhead expenses going to high salaries and the corporation residing in a Los Angeles penthouse office suite to give the company a facade of success, this company has not been financially profitable for decades.

     

    Cadiz, Inc.'s financial track record has been wretchedly miserable. Who are the fools that continue to invest in this?
    16 Sep 2012, 03:39 AM Reply Like
Full index of posts »
Latest Followers

StockTalks

  • CDZI "Water assets" disclosed to creditors? Criminal charges if not? Lots of CYA. Preparing for lawsuits if/when this collapses?
    Aug 10, 2012
  • CDZI 10Q now shows "water assets". Half of all assets worthless? Sounds like Stanford marking up his island $1b in 1 day.
    Aug 10, 2012
  • CDZI SMWD irrelevantly approves CVWP. Now, they all get to wake up to the reality that the MWD already said they won't let CDZI use the CRA
    Aug 1, 2012
More »

Latest Comments


Most Commented
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.