Caly,
You seem to be following this one. Me too!
I assume that you've seen the writeup at the valueinvestorsclub.com from last year arguing that the stock is probably worth at least $5 a share. I found it convincing and have been buying.
Lately, I am wondering about these enrmous blocks that are going through and wondering if they aren't going to impair the value of the NOLs b/c of the IRS rules. Any thoughts?
In the past two months or so, it seems that almost a million shares have traded hands, mostly in huge blocks.
I have to guess that Dimensional Fund Investors is getting out, and doing so at any cost. The downward pressure has been pretty extreme.
My own surmise here is that Steel Partners has a use for the NOLs. I think that the NOLs might find their way to WHX Corp, if a buyer doesn't show up soon. (WHX is already a large holder of shares of COSN.) The NOLs are obviously worth more to a company that can use the state credits too, which despite its many operations, I don't think that WHX Corp can use. Bairnco, another formerly large Steel Partners holding, met with this same fate about a year ago.
Since the $23M in cash, plus the $10M to $40M in NOLs would take them to $33 to $53M in book. I really think that this amount is conservative though, and that this is clearly the closest case of a fifty cent dollar that I have ever seen.
There is obviously some risk with the estimation of the usability of the NOLs. Worse, the large blocks could have impaired their value.
I am also having a little bit of difficulty figuring out the rights offering. Any help with that would be appreciated. |
