Dragni Dragnev

Cal Dive International, Inc. (OTCMKTS:CDVI) Struggles To Recover

by Dragni Dragnev November 27, 2014


October 2014 was a virtual disaster for Cal Dive International, Inc. (OTCMKTS:CDVI, CDVI message board). The month saw company stock prices drop from almost one dollar to exactly one dime per share.

The CDVI didn't really do much better in November – its slide continued with frightening speed right up until last Thursday, when it finally began to turn the tide. How and why did that happen?

At this point, it's pretty much anyone's guess what motivated investors to start buying and push the ticker back 34.00% up, then another 28.36% up and finally – 40.12% up yesterday.

Hopeful investors and opportunistic traders may have seen this extreme dip as the perfect opportunity to stock up on “cheapies” - because, even after all that jumping around share prices is currently as low as up to $0.1205.

Additionally, many investors who are used to the OTC Markets being a seedy place, populated mostly by dubious companies, must have also reasoned that – “hey, a dime a pop isn't too high a price to pay for the stock of an operational company that used to be on the NYSE”. And to some extent that train of thought is correct, but it is also flawed.

CDVI got de-listed from NYSE exactly because it had trouble keeping up with that marnet's high standards. The company's latest financial report shows that although it is it is operational, CDVI is far from profitable.

  • Cash - $9.6 million
  • Total current assets - $237 million
  • Total current liabilities - $391 million
  • Revenues - $114.5 million
  • Quarterly net loss - $42 million

At this point, investors should probably ask themselves – do I really want to own a piece of a company with financials such as these, even if its stock is as cheap as CDVI's currently is?

As the old saying goes, "even a dead cat will bounce if it falls from a great height". That may very well be the phenomenon that CDVI is experiencing right now, but if it is - how long can such a bounce last?

Comments 1

1. Guest
November 27, 2014, 07:30PM

Quotes For assets, it looks like you used 'current assets' (i.e. contracts in progress). You didn't count property and equipment, which changes the asset figure from your $237M to $571M (assuming you believe their appraisal).

Taking that figure, and also the total liabilities figure, in turn gives a book value of around $1.60 .

Did I miss something there?

Note also that the loss figure is mostly depreciation. It's still very bad of course.

I really wish they'd just sell assets for market price and pay back the shareholders. Or go for some sort of buyout. They may also benefit from a settlement of their lawsuit against BP related to the Macondo oil spill.

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