For those unfamiliar with our work on Cadiz, we would encourage you to read our two articles detailing why we think the company is worthless. They are linked below.

Just this week, a new development in the CDZI story has taken place.

Major Shareholders Lower Stake in Cadiz

On November 5th, Odey Asset Management filed a form 13G that shows they have lowered their stake in the company.

Previously, Odey had a 2.36 million share stake in the company, as of January 2015. This was up from their initial 1.7 million share stake that they took in the company in June of 2014.

Their stake has now been lowered to 0.93 million shares.

It appears that recent events, including those we have written about, may have driven Odey to significantly lower their stake.

Our Initial Call: 100% Downside

Our first article can be found here, and it details the company’s sole project, which we believe is destined for failure.

Five key points of our initial article were:

  • A letter on October 5th from the California State Office of the Bureau of Land Management continues to paint a bleak picture for CDZI’s focus — its ongoing “water project”.
  • This reconciles with, and further validates, past critical articles suggesting that the project is doomed for eventual failure and, as such, the company may be as well.
  • On top of its main business operation looking like an impossibility, CDZI faces a major liquidity crisis and has enormous debt coming due
  • As it stands, CDZI’s balance sheet is insolvent and the company’s equity is worth $0 dollars on paper, with seemingly no future road toward profitability or cash generation.
  • Without steady profits, we value CDZI at what it’s worth on paper and believe it’s is on its way to $0, be it from bankruptcy, eventual dilution or other means.

On October 26th, we wrote a follow up detailing a recent Southern California Metropolitan Water Department Board Meeting, in which they made it clear that they were “not pursuing” CDZI’s dubious project.

The GeoTeam remains short CDZI.