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Saturday, October 29, 2011


Occasionally, I'll see a teeny, tiny stock I'm curious about.  Currently, that stock is BNX.  At a recent price of $.08, the entire company is valued around $2.1MM.  It's traded on the Amex, and is about two to three weeks away from being delisted, unless they can get an exception.

Looking at the financial numbers, as of June 2010, they had 147k in cash.  On a yearly run rate, their finance related business (based on about 700K in Q2) is probably about 2.5MM/year.

They just announced they sold Look.com for $400k on Friday.  If assuming their cash position really didn’t change much in Q3 (they’re exiting the search business, so the business will look smaller, presumably they’re rightsizing for that, it’s after the tax season, etc), they probably will have about 500k in cash to start November.

They’ve done a variety of things to raise cash (they borrowed 600k against Banks.com for working capital, the CEO’s loaned the company money, etc.)

They have 9MM in intangible assets, which they’re gradually depreciating.  If they were forced to liquidate, it’s my belief you could sell 3 of their domains (irs.com, banks.com, and filelater.com) for 3 to 5MM.  Given the market cap is 2MM, the stock could potentially pay out 100%, even if it was forced to liquidate off the pink sheets.  Obviously, if you bought it higher anytime over the last few years, you’d be unhappy.  However, if you can buy shares for $.08, it seems relatively low risk, even if you’re going to end up holding an unlisted stock for a while.

There may be an opportunity to pick up more low cost shares between now and year end, as any existing holders take the tax loss - so definitely worth putting this one on your radar screen.

More to come...


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