October 9, 2015 9:24am


 

Reduces its workforce by approximately 50% to 20 FTEs

 

All affected employees will receive severance pay and outplacement assistance. As a result of the reduction in force and associated costs, VSTM estimates annual savings of approximately $4.9 million in cash operating expenses on a going forward basis, with estimated one-time severance and related costs will be recognized - approximately $8.25 K through Q4 and Q1/16.  

 

The Bottom Line: Painful decision! Remove the people before the headstones are placed.  I would foresee a combination with another Westphal company.

VSTM is DOWN -$0.12 to $1.86 in the pre-market. VSTM has $3.58 cash per share, no debt. VSTM is cutting its workforce – bound to happen. A whole lot of cash that could be dealt to a prospective buyer or merger candidate!! 

As a result of the reduction in force and associated costs, Verastem estimates annual savings of approximately $4.9 million in cash operating expenses on a going forward basis, with estimated one-time severance and related costs of approximately $825,000 over the fourth quarter of 2015 and the first quarter of 2016. VSTM reported $132.1M in cash and cash equivalents at the end ofQ2/15. Maintaining BUY yet, speculators will gobble from the upside.