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Strategies & Market Trends : Low Price/Cash Ratio Value Stocks
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To: RockyBalboa who wrote (1234)2/12/2008 9:53:28 AM
From: RockyBalboa  Read Replies (2) of 1931
 
A severe warning about cash rich stocks and their questionable investments

See TPPH

As of February 8, 2008, we had approximately $100,000 of cash and cash equivalents and had accounts payable and accrued liabilities (including unpaid severance costs and unpaid accrued vacation but excluding lease termination costs) of approximately $6.5 million. No severance benefits are being paid currently to any employees.



We hold $3.8 million in face amount of Asset Backed Capital Commitment Securities issued by trusts that Ambac Assurance Corporation can require to purchase perpetual preferred stock issued by Ambac Assurance. Ambac Assurance is a subsidiary of Ambac Financial Group, Inc. As previously reported, as a result of the uncertainty in the credit markets in the second half of 2007, auctions for these auction rate securities failed and the interest rate on these investments was reset to LIBOR plus 100 basis points. Interest payments on the securities continue to be current. As the credit position of Ambac and other monoline insurers deteriorated, we have been unable to sell these securities notwithstanding the fact that nationally recognized rating firms continue to assign them an investment grade rating. Because we cannot liquidate our investment in these securities, we do not have the cash necessary to operate our business. We have assumed that no proceeds from the sale of these securities will be available to finance our current operations.
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