Friday, December 18, 2009

A quick word on Cardero (CDY) (CDU.to)

As per the news release this morning, the iron ore deal with China's Nanjinzhao Group is going through as planned, with $58m paid and $30m to come on December 31st.

So if we check the last quarterly we note that CDY holds net assets of $44m. To that we can add maybe $14m due to the continued upwards valuation of ITH.to. Then let's add the $88m being banked with the Chinese this month.

So, via the ballpark math we have $146m in assets (a lot of that liquid assets) and 58m shares out. That's around $2.50 per share. This would mean that the current U$1.37 per share pre -market price is a total bargain except for one small detail; the company is run by self-serving crooks and will find a way of ripping off the retail holders somehow. As such, it's still totally avoidable no matter how cheap it looks on paper. DYODD.

Pisco sours served. The end.