A new investor has filed a 13D notice in relation to MathStar Inc (OTC:MATH).
When we started following MATH, it had a market capitalization of just $6.2M based on its December 16, 2008 close of $0.68. We estimated its liquidating value to be more than 120% higher at $14.4M or $1.57 per share. The value in liquidation was predominantly cash and short term investments in the amount of $14.8M. The board had largely suspended the company’s operations and was in the process of evaluating its “strategic alternatives, which could include merger, acquisition, increasing operations in another structure or liquidation.” MATH had twice rejected unsolicited merger proposals and Salvatore Muoio of S. Muoio & Co. LLC had been urging MATH’s board to consider liquidation rather than a merger.
Mr. Zachary McAdoo on behalf of The Zanett Group – the new investor entering the fray at MATH – filed its 13D notice on December 30, 2008 and attached the following letter to the company:
December 30, 2008
Douglas Pihl
Chairman of the Board
Mathstar, Inc.
19075 NW Tanabourne, Suite 200
Hillsboro, OR 97124Dear Mr. Pihl,
I am writing to express my opinion as a shareholder that we strongly urge the
Board to liquidate Mathstar, Inc. rather than acquire another company.Sincerely,
Zachary McAdoo, CFA
Short, sweet and to the point. Hopefully management can hear the drum beats calling for liquidation.
MATH is up around 18% since we started following it, but it’s still trading at half its liquidating value and a little more than half its net cash backing, so we’re maintaining our position.
[Disclosure: We do not presently have a holding in MATH. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.]
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