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Biotech / Medical : Cell Genesys (CEGE)
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To: ayn rand who wrote (823)3/26/2000 7:03:00 PM
From: peter michaelson  Read Replies (1) of 1298
 
Hi north:

I do not see why you would be omitting capital gains taxes due from CEGE upon sale of its ABTX stake. Wouldn't that take away about $200 million of the $655? Not sure of CEGE's basis in ABTX.

Then, we must not ignore the potential impact of CEGE' sales of ABTX on the market price of ABTX stock. I don't know the details, but it's a factor.

Then, very importantly, IMO, but often over-looked, is that cash on the Balance Sheet cannot be simply added to the price of the stock. Cash at the company may not be distributed to shareholders without dire tax consequences. Management has a horrible way of depleting cash (I don't mean at CEGE, but in general) when it has too much of it.

There are plenty of companies selling for less than the value of its liquid assets, net of liabilities - and for good reasons.

I am not opining on CEGE. I am utterly incompetent to evaluate its technology. But I am pretty sure that the $27 per share of cash is really worth only about $10 to $15 to the shareholder.

peter
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