A Quick Gain on Rubicon Technology, Inc.?

Disclosure: I have no position in any securities mentioned below.

Short post here…

Rubicon Technology, Inc. (RBCN) sold off their Batavia, IL property today (8/20/2018). They are expecting to receive $6.35 mil after paying various expenses related to the sale of the property.[1]

After adding this figure to their June 30th, 2018 net cash position, we arrive at a per share price of around $9.05. The stock last traded hands after hours at $8.55.

RBCN

Be very wary of stocks trading below net cash, as there is likely a reason for this. Optimally, the cash proceeds from the sale of this property would be allocated towards profitable projects. The market clearly does not think that this will be the case. On one hand, you have a company with a ton of cash on hand with a new CEO and a plan to liquidate its assets related to LED manufacturing to focus more on the optical and industrial sapphire markets. On the other, you have had a company that has had negative cash flow from operations for the past 4 years.

Another risk is the risk that the company’s balance sheet changes significantly from this quarter to the next.

Can this company make a turnaround?… who knows… but I think it at least warrants further attention at this valuation.

– Eddie

[1] https://www.sec.gov/Archives/edgar/data/1410172/000121390018011430/f8k082018_rubicontechno.htm

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