Mystery Stock

The New York Times reports:

The Boys and Girls Club of Pittsfield, Mass., relies, in part, on financial gifts to keep running. But officials were not sure they wanted to take a donation of poorly performing stock in a small company when it was offered two years ago, worrying about potential liability and risk to the organization. And club officials figured it would not net that much money, anyway.
Nevertheless, the club decided to accept the gift — which turned out to be the best decision the 107-year-old organization has ever made. The stock skyrocketed in value last year, and it was sold for $13.9 million in December 2006.
“It was basically worthless when we got it,” said John Donna, the club’s president. “I don’t think this happens once in a lifetime. It happens once in several lifetimes.”
The club, which serves thousands of youths in Pittsfield, a city of 45,000 in western Massachusetts, announced the windfall this week, saying it wanted to take time to consult with accountants and lawyers and invest the money in local savings accounts and certificates of deposit. It has created an advisory board to explore how to use the money. So far it has spent $500,000 on much-needed structural improvements to its building.
Mr. Donna said the club agreed not to disclose who donated the stock or the company, but he said the donor was “very happy this happened.”

Well, Felix Salmon wonders what the stock is. He surmises:

If we can take Zezima’s story at face value, we can probably assume that
* The company was publicly listed at the end of 2005, but basically worthless – which probably means it went public at a much higher price some time before then.
* By the end of 2006, the company had skyrocketed in value, quite possibly by a factor of more than 1,000.
* Someone closely connected with the company has some kind of connection with Pittsfield, Mass.

With that as my guide, my guess, and it’s a completely wild guess, is that the mystery stock is none other than…


Cambridge Heart Inc. (CAMH.OB).
dun dun DUNNN

Posted by on November 5th, 2007 at 2:00 pm


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