From the comment thread last month on his pick Hemisphere GPS (TSX: HEM.TO) on the Value Investors Club:
issambres839 (Aaron Edelheit):
How does a company that has no debt go from having a $250 million market cap to a $15 million market cap excluding net working capital?
While clearly $5 per share last May was too high in hindsight, is US$0.75 a little ridiculous?
Judging from the price action since then, apparently $0.75 was a "little ridiculous", but this one of the responses Edelheit got last month to his question:
Hi Issambres. . .I don't know anything about this company, but to your question of:
"How does a company that has no debt go from having a $250 million market cap to a $15 million market cap excluding net working capital?"
Obviously one potential answer is "Because the company is worth $15mm"
Given the desperate nature of your question I wanted to at least write down the most obvious response. I do this not to be a jerk, but because you seem to be insanely frustrated and at the very least it's good to try to think clearly about such things. Mr. Market revalues companies all the time and it can be really exasperating when you think he/it/whatever is totally wrong. But you have to make allowances for the divergent opinion. I'm sure you're thinking about this question all the time, so sorry if this seems condescending. . but i dunno... how else could an uninformed VIC member answer your question?
Some other interesting comments there, and some thoughtful responses from Edelheit. Worth reading.