S. Muoio & Co. has called on MathStar Inc (OTC:MATH) to include in the proxy statement for the 2009 Annual Meeting a vote by shareholders to approve a voluntary liquidation of MATH.
We’ve been following MATH since December last year when it was trading at $0.68 because it was a net cash stock with a substantial stockholder lobbying management to liquidate. The stock is up 19% to $0.81 Friday, giving it a market capitalization of $7.4M. We estimate MATH’s liquidation value still to be around 94% higher at $14.4M or $1.57 per share. That value is predominantly cash and short term investments and doesn’t take into account any further value that the sale of the FPOA technology and intellectual property may yield. Two activist investors, Mr. Salvatore Muoio of S. Muoio & Co. and Mr. Zachary McAdoo of The Zanett Group, have been urging MATH’s board to consider liquidation rather than a merger. MATH’s board seems to agree, twice rejecting unsolicited merger proposals, suspending the company’s operations and exploring “strategic alternatives, which could include merger, acquisition, increasing operations in another structure or liquidation.”
S. Muoio & Co. attached to its most recent schedule 13D notice amendment the following letter to the board of MATH:
February 10, 2009
Mr. Douglas M. Pihl
Chairman of the Board
MathStar, Inc.
19075 NW Tanabourne, Suite 200
Hillsboro, OR 97124Dear Mr. Pihl,
It has come to our attention that MathStar has timely received a proposal from another shareholder to include in the proxy statement for the 2009 Annual Meeting a vote by shareholders to approve a voluntary liquidation of MathStar.
As we stated in our letter of December 12, 2008, we believe that a prompt liquidation of MathStar is in the best interest of the company and its stakeholders. We also continue to believe that pursuit of a merger or alternative transaction flies in the face of the wishes of many of the company’s owners.
As such, the board of directors must act in good faith and cause the proposal to be put on the ballot for the forthcoming annual meeting of shareholders.
Sincerely,
Salvatore Muoio, C.F.A.
Managing Membercc: MathStar, Inc. Board of Directors
[Full Disclosure: We do not 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.]
Greenbackd 
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