This mental exercise assumes efficient-market theory and is fundamentally in the same predicament as asking how and why is it possible for substantially all of the company's assets to sell at $4.3 million USD when just one portion of those same assets were documented and appraised at over $100 million.
The usual answers are:
1. Valuations don't matter, it's just what the market pays.
2. Bankruptcies are tough and that's just what happens.
Nah.
The Nexant appraisal estimated the cost to produce a 30 metric ton succinic acid plant in Canada at between USD $132 - $140 million, and further valued it as an operating facility within the range of USD $53 - $72 million. Those valuations would either meet or sufficiently exceed BioAmber Sarnia Inc.'s debt.
Couple the physical assets with the NOLs, billion dollar Vinmar contract, and comparable cost valuations to produce the same in both time and money (Nexant only valued the Sarnia plant); and valuations range from hundreds of millions to billions.
The swing from .03 a share to $4.16 a share is not only plausible, there are valuation models and sufficient documents to support it.
Additionally, and in the absence of a multi-step transaction or pending corporate transaction involving BioAmber Inc., there is the obvious problem that given the excessively low Visolis Transaction when compared to the Nexant appraisal (and again, not an appraisal of the entire company, but only of one physical asset of one of BioAmber Inc. subsidiaries), it raises the question of fraud.
Still, KKR, LCY Chemical Corp. and their joint ventures are absolutely planning on continuing BioAmber's operations, producing bio-succinic acid, bio-succinic acid derivatives, and competing against equivalent petro-based products and companies in the short term, and long term becoming the global bio-based front runner. These are ultimately billion dollar efforts.
For that, they need BioAmber.
Do Govern Yourselves Accordingly
