RE: Investors Digest Article (Beckysboss, 7/28)I have been looking closely at the finances, and I hope this expansion/update on Robert Floyd's analysis is helpful. In his article, he considered the value of Nucryst shares and cash, concluding that at the time of writing, investors were valuing iFire at about $1.50. Here's my version of an update, and with a slightly different approach, which includes capital assets as well as cash.
First, cash will be decreasing. From Dec. 31 to Mar 31, it went down from 119 million to 101 million, and I am guessing it would be about 80 million by June 30. However, a lot of this cash goes to capital assets (buildings, real estate, equipment, etc.) which retains considerable value. I have done a rough estimate which includes capital assets, and have concluded the company is worth at least $1 per share even with decreasing cash, if one includes other assets.
Second, since Floyd's article, Nucryst share price has risen to $17, giving a value of $2.50 per share for Westaim's holdings in Nucryst.
So, excluding iFire, Westaim could be worth $3.50 per share. The market appears to be valuing iFire at about$1.10, with WED trading at $4.60, and that seems to be outrageously cheap to me, now better than Floyd's estimate of $1.50 per share when he did his analysis.
I'm not saying there was anything wrong with Floyd's numbers, just that I don't believe one should get too concerned over a reducing cash value over time, and pointing out that the Nucryst value is higher now than when he wrote the article.