Hedge Fund of One

VaxGen Still Looking to Return Value to Its Stockholders

The analysis seems reasonable and the proposal simple enough. However, the lawsuit appears to be much more of a concern than the conclusion of the article indicates. The lawsuit makes this stock a binary proposition--i.e., up or down on whether the lawsuit fails or succeeds. If the suit succeeds, then there is no value and the stock is worthless, if the suit fails, then the stock might be worth the $0.86 per share, with a possible kicker for the "other potential valuable assets". So, assigning a price of $0.48 or somewhere in the neighborhood of 50% to 55% of liquidation value to the shares pending the lawsuit results seems reasonable to me. Based on probabilities alone, I would not bid the price of the stock up from here. But then, biotech investors/traders are used to placing binary bets on the outcome of FDA approvals.

Also, is the paragraph starting "We may incur ...", a quote from the financial report?