Earlier this month I wrote up PGNX when the company's stock was trading at $0.16, with the thesis that the release of escrow funds at the end of November would free up their cash and allow them to purchase a business again. The escrow was released as I predicted, but the company has decided to liquidate. Shareholders will receive a distribution of $0.17 in December, and the company will be shut down and the remainder of the assets distributed in a liquidating distribution. Remaining cash on their balance sheet is around $0.045 per share, and the company has indicated a liquidating distribution of $0.02 to $0.04 may be paid, although they also note liquidating expenses could eat up the remainder of the cash. This changes the investment to a purely mechanical liquidation scenario.
I'm holding my shares and will take the distribution and will likely wait for the liquidation to complete, as the IRR of waiting is very high even at the low end of the distribution range. Liquidations usually take longer than people expect and cost more, so there is still some risk. However, anyone who bought at $0.16 when I posted and receives a $0.17 distribution a month later shouldn't have too much to complain about.
Disclosure: Long PGN.H
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