Cadus Corporation (OTCBB:KDUS) Jumps On Buyout News

Cadus Corporation (OTCBB:KDUS) had been fluctuating quietly around the $1.52 mark with laughable dollar volumes up until yesterday, when its latest Form 4 hit the web and caused it to explode 10% up in a single session.

One detail in the Form 4 certainly got people’s attention. It announced that Carl Icahn had bought 12.5 million shares of KDUS‘s common stock on June 6 for $1.53 a piece. A quick check establishes that, at the time, the company’s stock was traded a whole 3 cents cheaper per share. The fact that Icahn was not only interested in buying vast amounts of shares shares, but was actually willing to do so at prices HIGHER than the daily close for the session was universally taken as an excellent sign by investors.

Some research reveals that, after this purchase, Ichan now has a total of 17.8 million shares, which represents 67.81% of KDUS‘s shares outstanding. This was also taken as a positive sign.

Overall, this is an interesting and encouraging turn of events indeed. The fact that Carl Icahn has not only expressed his interest, but spent about $20 million on KDUS stock can certainly be taken as a sign that the company shows a lot of promise. A look at KDUS‘s latest 10-Q also gives room for hope:

• Cash and cash equivalents – $10.6 million
• Total current assets – $22.3 million
• Total current liabilities – $447 thousand
• NO REVENUES
• Net loss – $371 thousand

True, the company has not had any revenues since 2010, but that is to be expected in the real estate branch KDUS is currently focusing on. That being the case, it’s obvious that this is why the company hasn’t been making making money recently. However, the fact that its net loss is as low as it is can be taken as a sign of sound management. Plus, the sheer amount cash on hand that KDUS reported does seem reassuring.

This is why a lot of people seem to be enthusiastic about the KDUS, and probably rightly so. Still, investors would do well to remember that the company is yet to attain commercial success. Whether KDUS will really be able to make it big remains to be seen.

Another OTC company that rose 15% yesterday, despite looking a lot less convincing, is Terra Tech Corp. (OTCMKTS:TRTC).