Sunday, July 18, 2021

Closing the Book on SIMA

I first wrote up SIMA almost 5 years ago with the stock at $0.65. Since then it went as high as ~$13 before falling back a bit.

A couple weeks ago the company put out a tender offer to buy out all sharesholders at $10 (oddballstocks wrote up a nice summary here).

SIMA offers up such a good summary of life here in the dark OTC space. One the on hand buying a stock near a dollar then having the company buy you out for 10x that is amazing! It's what I'm looking for and it's what my style needs to survive. But on the other hand the price is ridiculous and there is no one around to protect shareholders. The company puts out no press release or communication to the public.  The SEC does not care since they allowed SIMA to de-register and disappear.  

With the tender offer the company included financials. For 2021 we only have 9 months of data so I've taken the liberty of extrapolating that out to the full year (so the far left column is my linear estimate).

What do you think this stock is worth?  I'll go with $15 at least 

Now check out this independent fair value opinion from the tender:
"Access Value has determined that the fair market value per share of Common Stock as of March 31, 2021 was $6.11 on a minority, non-marketable basis and $9.60 on a minority, marketable basis."
Unbelievable!  The company has $8.58 in cash & securities right now and earned $0.58 the past 9 months yet it's worth $6.11 to $9.60?!?!  

But what can you do.  If you own shares your choice is either take the money or continue waiting.  I wouldn't count on the company treating you well.  Life on the OTC...

disclosure: long 1 share since I sold the rest last year at $8.67.  I think I'll just keep my single share 

1 comment:

  1. It's ironic because they assess the value to minority holders at $9.6 and that's what they're getting, so it truly is the value to you lol. With better governance, more liquidity or a larger corp it'd be worth more, clearly.