Ciboney traded 1,186,460 units on Wednesday at 16 cents for a 52 weeks’ high, but the stock closed with the bid at 16 cents to buy 1,813,540 shares as investor push to price up to levels not seen since 2004 when it traded as high as 32 cents. The stock has doubled since November 9 when it traded at 8 cents. On the September 24 there were trading in 4.36 million units and 5.36 on October 26 and 2.1 million units on November 16.
Why the interest in the stock of a company that reported a loss of $1 million for the quarter, ending in August and seems set to lose $4 million for the year ending May 2016? For the 2015 fiscal year, a loss of $5 million was reported and $8.7 million in 2014.
Ciboney has whittled down the funds it holds in cash and investments, to $14.5 million from $20.6 million at August 2014 and with the losses could be out of cash in another two years, unless they were able to sell the land which the company owns. The last valuation was done in January 2015 which gives a value ranging from $200 million to $215 million, but is on the books at $44 million. If the valuation of $207.5 million was fully booked, the net book value would be around 31 cents per share. So far Ciboney has not obtained a buyer prepared to pay a price close to the market value.
IC Insider has been informed that two parties have expressed an interest in acquiring the company in part. One proposal is without the land, with the land to be placed in a separate company to be formed to hold it in proportion to existing share ownership of Ciboney. The other would see FINSAC retaining the land in possible exchange for either a cash injection and or transferring the FINSAC shares to minority shareholders. The deadline for the offer is Friday this week,any agreement would be subject to a vote by shareholders. If the former proposal succeeds, cash inflows would be minimal initially and shareholders would have to wait on the sale of the land for further payment. In the second case, investors would see no cash but the share value could be between 30-40 cents, with the possibility of losses could be eliminated. There is no guarantee that any of the proposals will be accepted. In the meantime, the price of 16 cents is well under the 31 cents adjusted net book value.