The risk in this stock is not necessarily imminent. Take a look at the most recent 10Q and you see the problems. Or wait until the 10K comes out in a couple of weeks.
Their water business is bogus. They have NO position in the San Diego thing. MWD and SDMWD are doing that deal themselves. CLCI is offering to provide offline storage for Met. Unfortunately none of the facilities are in place. Furthermore there are lots of problems yet to be addressed, much less solved. My major question would be: Why does MWD need CLCI at all? There's this notion that because they thought of it first. Well BS, the USGS thought of it first, that's why the data was available for them to use. But anyway, so what? There's this notion that they have a lot of land there. Well so what? Other people have more land there. And worse, you don't need land, just a well field. And who owns a basin anyway? To make things worse, in their filings against the trash dump, CLCI has claimed the purity of the water in their basin. If you look at the purity of the Colorado River you find that it will degrade the Cadiz basin water. They claim that it will float on top. I say, since the water belongs to all the people of California, file an EIR that addresses the problem. They can't, they won't.
In other words CLCI has great hype. Look at their balance sheet. It absolutely sucks. Do the math on their business model, it doesn't compute. Take their best water estimates. It doesn't compute unless CLCI is allowed to pump in excess of what the recharge rate is.
Meanwhile, the issue of a full aqueduct remains unresolved. MWD originally turned down CLCI because the facilities were to capacity. They still need a way to get water from there to here. None of this solves that problem.
So CLCI would say they will store water for a 'non-rainy' day when the Colorado is low. Well how about the Arizona storage plan which is in place and being used now? If the Feds are forcing a solution, why not have MWD store in Arizona with already-in-place facilities?
The CLCI water stuff is all BS to try to push their RICO suit against WMX. Unfortunately they are using the San Bernardino Sheriff Dept. to prosecute the suit. Now these are the same guys who give you speeding tickets. They know workers comp back injuries, topless bars, etc. They know zero about companies, securities, financing, etc. etc.
Now get to the interesting stuff. CLCI has 32 million shares out. They are up to their eyeballs in debt. They are now running an agricultural company that they got out of bankruptcy. (Hey real farmers passed on SunWorld.) They somehow believe that their background endows them with farming expertise. - Check out Brackpool's background. It ain't pretty. He's taken produce firms bankrupt. Now he works out of tennis club at the beach. Check out the board of directors. How many of them are farmers? How many know agriculture? Do you see Tenneco? How about central valley farming combine folks? I see stockbrokers and financial manipulators. Do you realize that the SunWorld competition is global? How do you like competing with groves in the Baja? Chile? You get the picture. Check out their reputation. Call up Craig Corp., they just set up a citrus farming company in the valley.
Go back again and look at their debt obligations.
You don't like shorts. I actually am not yet short. I am shopping shares as we speak.
I don't like scammers. I believe that CLCI is run by scammers. Nothing nice about them.
Shorts are like longs. They just believe that the price is too high. Remember shorts have to BUY ultimately. Longs have already bought. They can only sell. Shorts usually spend more time researching companies than longs because the market has an upward bias. Listen to them. You can always say BOGUS, and buy in as a long.
Shorts help the market. They provide liquidity and balance. No company ever went out of business because of shorts. They go out of business because they lose money.
I think that CLCI is a loser, and I am looking for the best way to vote my conviction. |
