Wall Street Layman

I am long Aptinyx Inc (APTX), a biotech company based in Foxborough, Massachusetts, that is liquidating. It is trading at a market capitalization of $5.0 million ($0.077/share). I calculate is it work 1.7x that. I'm late to this one. The shareholder meeting was held on June 30, 2023, and the dissolution was approved. Here's a link to the circular with all the details . Here's my calculation of liquidation value using the March 31 balance sheet.  47.8 Current Assets -29.7 Liabilities - 9.0 Wind-down Costs (estimates from circular) -----   9.1 Liquidation Value ($0.13/share) This should be a very straight-forward liquidation. The company has lots of cash and very little in non-current assets nor liabilities. Expect a sizable initial distribution with only a little later.

 I am long Cyteir Therapeutics (CYT), a biotech company based in Lexington, Massachusetts, that is liquidating. It is trading at a market capitalization of $92.3 million ($2.60/share). I calculate is it work 1.4x that. On Friday, June 30, 2023, the company announced a decision to liquidate the company. Here's my calculation of liquidation value using the March 31 balance sheet. 138.4 Current Assets - 4.0 Liabilities - 6.0 Wind-down Costs (estimate) ----- 128.4 Liquidation Value ($3.61/share) This should be a very straight-forward liquidation. The company has lots of cash and very little in non-current assets nor liabilities. Expect announcement of a sizable initial distribution as part of a proxy statement for a special shareholders meeting and then a smaller distribution later.

I am long Oncorus Inc (ONCR), a biotech firm in Andover, Massachusetts, that is being liquidated. It is trading at a market capitalization of $2.8 million ($0.1093/share). I calculate a liquidation value of 6x that. Last week they announced the layoff of almost all their employees, the departure of the CEO, COO, and Chief Medical Officer and estimate a cost of $2.6 million in severance and other shut-down expenses. This week they announced the company will be liquidated. The balance sheet, as of March 31, 2023, showed current assets of $46.7 million, current liabilities of $31.1 million and just one long-term liability of $47.5 million. That one long-term liability is for the lease of 105,000 square feet of biotech manufacturing and lab space in Andover - a suburb of Boston. Biotech real estate has been doing very well in Boston for some time and the landlord owes the company $24.2 million as reimbursement for their improvements to the property. Most likely the company will be able t...

 See Andrew Cherna's execellent write-up on Seeking Alpha . He beat me to it.

 Sable Permian Resources is a small player in the Permian shale oil patch. They have the oil rights for 127,600 acres and produced an average 51,500 BOE/day (barrels of oil equivalent per day) in the past quarter. Current book value of these assets is $990 million. Sable underwent a major restructuring in 2017 and then again in 2019. On June 25th they file for Chapter 11 bankruptcy protection. This time the assets are being sold off. The auction is set for October 2nd - this coming Friday. Sable is not a public company. The overview of the company and situation provided for the bankruptcy proceedings is the best place to start. The company has $10.5 million in cash and $1.3 billion in debt in three tranches: $574.9 - Revolving Credit Facility $707.7 - 12% Senior Secured First Lien Notes due 2024 (ask price: 10; no bids) $36.1 - Senior Notes (price: 0) Despite their name, the First Lien Notes are subordinate to the Revolving Credit Facility. All the assets are in the subsidiary na...

Neiman Marcus Group is planning to emerge from bankruptcy September 30th. Their restructuring plan was confirmed by Judge David R. Jones on September 4th. Neiman Marcus has been owned by Ares Management and the Canada Pension Plan Investment Board but they will be losing their ownership in the restructuring. The creditors will become the equity holders. The plan is pretty complicated. There are 14 different classes of claims and the equity is being split among five of them. There is only one bond issue trading in the public market: 7.125% Senior Debentures due 6/1/28 Price: 2.00 Outstanding: $125 million Treatment:1.7% of equity (2.8% diluted down to about 1.7%) + 2.8% participation rights in the Exit Loan Facility The official Disclosure Statement of the plan  (Exhibit D: Valuation Analysis) puts the total equity in the reorganized Neiman Marcus at $1.015 billion. A naive valuation of the bonds using the 1.7% equity would give a fair price of 13.80. But will it reach tha...

Overview Siemens AG, the giant conglomerate with headquarters in Germany, is spinning off 55% of their energy business later this month. Each Siemens shareholder will receive one share of Siemens Energy for each two shares they own on September 25th. The company intends to sell most of the remaining 45% in the open market 12-18 months from now. Spin-offs sometimes provide great investment opportunities. Many shareholders, when faced with two stocks after purchasing just one, decide they want one and dump the other. If many decide to dump the same stock the sudden selling can drive the price down to unreasonably low prices. Other times a lackluster parent company is able to shed an unprofitable business unit and start producing financial reports that allow the market to realize their full value. The Siemens Energy spin-off appears to have both of these dynamics at play. I recommend purchasing the Siemens stock now, before the spin-off, or wait for Siemens Energy to sell at a great price...