| |
Warning: THIS STOCK CAN BE DANGEROUS TO YOUR HEALTH
Potential investors should review the filings of this company carefully. ALL of its assets are fully mortgaged, and will be repoed by its debtholders. It has zero chance as an operating company with its current management.
Check out Keith Brackpool - founder and president of the company. His bio shows two companies that he has shepherded into bankruptcy.
CLCI has a dismal record in agricultural development and operations. Now they are trying to fly SunWorld out of bankruptcy. Low margin stuff; a break-even attempt to warehouse the land. Cannot make a current profit for shareholders given NAFTA and present cost structure. Development of a new desert agricultural area has been a flop - <1000 acres in production, no new development for years because it is unprofitable. Land is now leased, hopefully.
Water business is built on Hope and FUD. They have appropriative rights of an overlying land owner, but zero ownership beyond that. Water ownership for export belongs to whoever can do it within an EIR. Assuming CLCI could find a buyer, they have no way to get it to them. Plumbing is expensive, and you just can't run pipes across someone else's property. CLCI has no friends, they have no clue.
Their entire business model today seems to be exploitation of a litigation they are pursuing against RailCycle. (RailCycle is a planned dump to train LA's garbage into the desert and pile it near the Cadiz basin. Not on, but near the basin. Cadiz claims it could pollute "their" basin, despite the fact that the dump will overly another 'brackish' basin. - For political reasons, the dump probably won't be built. For economic reasons, the dump probably isn't practical. - RailCycle is a joint venture between Waste Management and Burlington Santa Fe RR. Cadiz says that RailCycle has engaged in criminal behavior.) The law suit is Cadiz's major chance to ever make a profit. Because guess what, if CLCI ever expects to move water around, the only candidate property owner with appropriate right of way is the RR. Can you imagine that a criminal prosecution is earning suck points with BN? Guess what? The RR has just as much right to the water basin as CLCI does. Guess what? CLCI bought their Cadiz land from Santa Fe. And guess what? The railroad still owns the railroad.
IMHO the reason I carry an eleven foot pole is to fend off stuff that I wouldn't touch with a ten foot one. CLCI falls into that category.
The question might be: If not a buy, then a short? Good question. It's linked with the overseas investments of FMR and MS. You would need to penetrate their hallowed halls to answer that. Ordinary investors should run, not walk to the exits.
MC |
|
