VICL Cigar Butt Long

2 thg 5, 2019

Liquidation value near $2. Likely reverse merger deal soon.

2 thg 5, 2019

Ghi chú

VICL trade idea, do your own research, this is not investment advice but educational content. Disclaimer I am long VICL.
VICL is a shell company. This means it is non-active and currently a vehicle for possible financial maneuvers. What’s of interest is the balance sheet as VICL liquidation value is significantly above the price it currently trades. Looking at the balance sheet we need to discount assets that will be difficult to convert to cash. Figures in millions*
Cash $11,870 - no discount needed. Marketable Sec. $36,201 no discount needed. Receivables and other assets $1,128 - 70% discounted value = $790. Long term investments (bonds) $2,386 - 90% discounted value = $2,147. Equipment + other assets $759 - 30 % discounted value = $227. Total liquidation value of assets - $51,235. Liabilities don’t get discounted they are almost always the same as listed on the balance sheet. Liabilities on the balance sheet - $3,581. Total liquidation value $47,654. Total shares outstanding 21,820,195. Per-share =$2.18.
Now since the company is now a shell cash burn should drop significantly as the company isn’t doing much. Cash burn may be slightly over $1 million /year. Very manageable and won't destroy the thesis, if the company takes time exploring options. We can see a reverse merger similar to GTXI (check chart). Or the company liquidates. Worst case company buys new drug candidate, possibly overpays for another business. Overall low-risk trade with a sizable reward: risk profile. Timeline for trade is under a year. The reverse merger could be announced at any time, thinking news within 3 months.

24 thg 9, 2019

Ghi chú

Reverse merger deal happen. $1.60 per share. Deal took longer than expected and I realized there were some warrants I missed which lowered potential. Sold into strength PM day of news. New ticker is BBI Brickell Biotech.