Mondegreen Posted January 22, 2018 Share Posted January 22, 2018 Rubicon Technology is an advanced materials provider that develops, manufactures, and sells monocrystalline sapphire products for optical and industrial systems. It has undergone significant downsizing having left the LED and mobile device markets and is currently trading significantly below the value of its cash + held for sale assets. Cash burn has continued to decrease since the new CEO has taken over, and there could be significant upside depending on the successful execution of the turnaround strategy and successful use of the cash + NOLs. Rubicon was covered by Seeking Alpha author Antao here (sorry for the paywall): https://seekingalpha.com/article/4059170-rubicon-tech-40-percent-upside-minimum-divestiture-story I'd be interested to hear your thoughts, Mondegreen Link to comment Share on other sites More sharing options...
writser Posted January 22, 2018 Share Posted January 22, 2018 Interesting find. Looks like there are some good people on board. Rubicon shut down their unprofitable business, switched to a cheaper accountant, shrank the board, got a new CEO, adopted a plan to preserve their NOL's, all the right stuff. Not sure about the carrying value of their for-sale assets: they've been trying to sell them all 2017 unsuccessfully, an extra discount might be warranted? I'm sure shareholders will do fine if they manage to sell their excess assets at a decent price and stop the bleeding. However, the past 9 months cash burn was still quite significant if you adjust for changes in working capital. The iceberg melts a bit too fast for my tastes. On the other hand it is trading at a ~50% discount to book and the NOL's provide some extra upside in case the new CEO manages to do the same trick as he did with PRLS. I might have to take a better look. Thanks for posting. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted January 22, 2018 Share Posted January 22, 2018 I actually just looked at the last week. I think the bull case is pretty obvious, but I have some concerns: * While the new CEO is doing a good job reducing costs, they have burned more cash than it may appear at first glance. A significant amount of PP&E has been reclassified as "Current Assets Held for Sale" and sold off. PP&E has shrunk from $7.11 million at 12/31/16 to $1.307 million as of 9/30/17. * Properties held for sale isn't the same as cash in the bank. It may take longer than anticipated to sell the properties. And keep in mind that they are a basically a forced seller here. * They can't really hunt for an acquisition until they close on the properties held for sale. This is going to be painstaking for shareholders as they watch the company's NCAV shrink. * Being a publicly-traded company on the NSADAQ is, in-and-of itself, expensive. I think they are small enough that they consider going OTC and de-registering from the SEC. Link to comment Share on other sites More sharing options...
valuedontlie Posted January 22, 2018 Share Posted January 22, 2018 Not sure why they have to wait to look at making an acquisition... while a large portion of BV is tied up in RE/equipment held for sale, they already have a decent pile of cash on hand... If we assume the latest quarter fully reflects the exit of the LED business then it looks like they are burning around $1m per quarter. They have been running a negative gross margin for a long time (Q3 included) so can pretty much assume the inventory is worthless... That leaves the $15m in assets held for sale... Since they moved all of that PP&E into held for sale (4Q16) they've sold $7.5m and taken $675k in writedowns (after the initial $26.5m writedown)... seems like they are chipping away at it... Even if PP&E for sale only worth 25-50% of carry value ($4-8m), all other assets worth zero, total liabilities of $2.2m and cash burn $1m per quarter = $15-19m cash/BV by yearend 2018 ($5.50 to $6.95 per share). This is all about the CEO doing something with that cash... Link to comment Share on other sites More sharing options...
porcupine Posted January 27, 2018 Share Posted January 27, 2018 What do you think of the rights agreement? What would be the reason to protect shareholders against someone owning over just 4.9% of the shares? Link to comment Share on other sites More sharing options...
bizaro86 Posted January 27, 2018 Share Posted January 27, 2018 The rights agreement is to protect the NOLs. Link to comment Share on other sites More sharing options...
porcupine Posted January 28, 2018 Share Posted January 28, 2018 The rights agreement is to protect the NOLs. Right. Is there a reason why the threshold is 4.9%? I'm not too familiar with protecting NOLs. Link to comment Share on other sites More sharing options...
bizaro86 Posted January 28, 2018 Share Posted January 28, 2018 The threshold is based on changes in 5% holders. If you have no new 5% holders and the existing ones don't change, you can't breach the threshold. Link to comment Share on other sites More sharing options...
porcupine Posted August 21, 2018 Share Posted August 21, 2018 They just sold their Batavia, Illinois property and expect to receive $6.35 million from the sale after all expenses. Looks like they're currently trading under net cash value when adding this figure to the June 30th net cash position. Link to comment Share on other sites More sharing options...
porcupine Posted August 21, 2018 Share Posted August 21, 2018 Made a new 52 week high today. Up 16%. Link to comment Share on other sites More sharing options...
writser Posted October 26, 2018 Share Posted October 26, 2018 Getting interesting again. Shares now under $8 for a ~$22m mcap. Pro forma ~$23m in cash and notes. Still some value in assets held for sale. Bunch of NOL's. Some good people involved. I just can't quite get comfortable with the annual cash burn. SG&A $1.5m for the past six months on top of a negative gross margin .. Link to comment Share on other sites More sharing options...
samwise Posted January 14, 2019 Share Posted January 14, 2019 A few developments I didn't see noted on the thread. 1. Share buyback announcement. Not sure how they are doing, but they did a lot in the CEO's last gig. 2. Bought the building they were renting, at 12% cap rate by my rough calculation. Reduces liquidity, but also cash burn. Link to comment Share on other sites More sharing options...
60North Investments Posted April 13, 2019 Share Posted April 13, 2019 Tried to find the amount of shares held by Tim Brog, but couldn't really locate a more precise number. I'd imagine that he has a big interest, but from what I could gather, he seemed to own less than 50k shares now and then some RSUs? Anyone with that information quickly at hand? Thanks! Link to comment Share on other sites More sharing options...
Tim Eriksen Posted April 13, 2019 Share Posted April 13, 2019 Tried to find the amount of shares held by Tim Brog, but couldn't really locate a more precise number. I'd imagine that he has a big interest, but from what I could gather, he seemed to own less than 50k shares now and then some RSUs? Anyone with that information quickly at hand? Thanks! Last year's proxy statement said: Includes 32,098 shares of common stock and 4,902 shares of restricted common stock. Excludes 45,000 restricted stock units granted to Mr. Brog. One third of such restricted stock units will vest if prior to May 12, 2021, the 15-trading day average closing price of the Company's common stock is greater than or equal to the target prices of $11.00, $12.50 and $14.00, respectively. No Form 3's or 4's since then. Link to comment Share on other sites More sharing options...
Foreign Tuffett Posted May 23, 2019 Share Posted May 23, 2019 Rubicon has made an acquisition: https://www.sec.gov/Archives/edgar/data/1410172/000121390019009496/f8k051719ex99-1_rubicontech.htm This is an interesting phrase to include in a press release announcing an acquisition: "this type of transaction was not exactly what Rubicon was looking for" Link to comment Share on other sites More sharing options...
writser Posted May 23, 2019 Share Posted May 23, 2019 Hah, you beat me to it. Peculiar indeed :) . Link to comment Share on other sites More sharing options...
valuedontlie Posted May 23, 2019 Share Posted May 23, 2019 anyone going to annual meeting next week? Link to comment Share on other sites More sharing options...
samwise Posted May 24, 2019 Share Posted May 24, 2019 No mention of cash flow or price paid. Link to comment Share on other sites More sharing options...
eclecticvalue Posted May 25, 2019 Share Posted May 25, 2019 I googled the company they acquired. It is no where to be found. Very strange. Link to comment Share on other sites More sharing options...
samwise Posted February 3, 2020 Share Posted February 3, 2020 Old news from December, https://www.sec.gov/Archives/edgar/data/1410172/000121390019026519/f8k121919_rubicontechnology.htm The conversion of assets to cash is almost complete. We will have 30M cash with 25M market cap. Cash burn in last 9 months was 0.156, I.e. small. No business developments on the pharmacy. CEO has 350k salary and owns 700k of stock, mostly given for free to him. There has been a lot of time for the paint to dry. Anyone still interested, or invested? Link to comment Share on other sites More sharing options...
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