MGTA pitch:
– Biotech company that halted any further development of their programs and announced exploration of strategic alternatives.
– Liquidation of the company is in the cards.
– The three main uncertainties between now and potential liquidation are the quarterly burn, winddown costs and the lease termination expense.
– Even assuming continued high cash burn rate for the next 2 quarters, there is 35% upside in liquidation scenario.
MGTA valuation:
– $128m of cash on the balance sheet.
– Accounting for 3 quarters of cashburn (-$41m), lease termination (-$10m), and other winddown costs (-$10m), leaves $1.1/share for potential distributions or 35% upside to current prices.
Exp. gain: +35% to $1.1/share
Full write-up (free guest account required):
https://www.valueinvestorsclub.com/idea/MAGENTA_THRPUTCS_INC/8235536262