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Strategies & Market Trends : Low Price/Cash Ratio Value Stocks
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To: Q. who wrote (1184)1/20/2008 6:40:36 PM
From: RockyBalboa  Read Replies (1) of 1931
 
MOVE 1.78, Cash per share 1.19 - is there a way to find out what kind of "short term" investments are made? Are these investments safe or are significant writedowns required?

The company itself states (see Risk Factors; yet there is no specific risk factor for Credit/Counterparty Risk):

Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
Our exposure to market rate risk for changes in interest rates relates primarily to our investment portfolio. We have not used derivative financial instruments in our investment portfolio. We invest our excess cash in money-market funds, auction rate securities, debt instruments of high quality corporate issuers and debt instruments of the U.S. Government and its agencies, and, by policy, this limits the amount of credit exposure to any one issuer.
Investments in both fixed rate and floating rate interest earning instruments carries a degree of interest rate risk. Fixed rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall.

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This does not necessarily apply to any of the companies, like MOVE, SPDE, or´the cash rich bombed biotechs but there have been cases like zapata where rumours persisted that they put cash into lower rated bonds. For more recent examples of soured investments see Etrade, MG or Ccrt.
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