Orange 21 Inc. (NDAQ: ORNG) shares opened lower after Costa Brava withdrew its $3.90 per share aquisition offer. Many investors are attributing this withdrawal to the poor financing environment that may prohibit anything but an all-cash deal. In fact, Orange 21 even reported a net income of $6,000 for the quarter compared to a loss of $58,000 during the prior year quarter. Consolidated net sales declined, however, to $12 million from $13.2 million. The benefits came from lower operating expenses.

According to the Schedule 13D/A filing made with the SEC:

"On November 21, 2008, Costa Brava sent a letter to the Board of Directors of the Issuer withdrawing its proposal to acquire 100% of the outstanding equity interests of the Issuer. A copy of the letter delivered to the Issuer is filed as Exhibit B hereto and is incorporated herein by reference.

The Reporting Persons believe that the shares of Common Stock of the Issuer are undervalued and they are considering pursuing any and all of the actions enumerated below.

The Reporting Persons may take such actions with respect to their investment in the Issuer as they deem appropriate, including, without limitation: (i) having communications with the Issuer's Board of Directors and management with respect to methods for increasing stockholder value; (ii) purchasing additional shares of Common Stock in the open market or otherwise; and (iii) making a tender offer for shares of Common Stock not owned by the Reporting Persons.

The Reporting Persons may also participate in discussions with potential purchasers of their shares of Common Stock, sell some or all of their shares of Common Stock in the open market or through private negotiated transactions, or change their intent as to any and all matters referred to above.

The Reporting Persons reserve their rights to make alternative plans or proposals in the future or to take other steps to enhance the value of their investments. The Reporting Persons further reserve the right to increase, decrease or eliminate their investment in the Issuer or take any other action relative thereto."

Related Companies
FGX International Holdings Limited (FGXI)
Luxottica Group S.p.A. (LUX)
Shamir Optical Industry Ltd. (SHMR)

Enzon Pharmaceuticals, Inc. (NDAQ: ENZN) shares moved higher after a large investor disclosed that they hired an advisor to explore strategic alternatives for the company in a Schedule 13D filing with the SEC. DellaCamerca Capital Master Fund engaged the investment banking firm Moelis & Company LLC to explore strategic alternatives with respect to the investment in the company. The 7.8% shareholder is likely attempting to find a buyer to boost the share price.

Last quarter, Enzon reported strong results and a net loss of just $2 million or $0.05 per share. The third quarter results were impacted by the $88.7 million net gain from the sale of a portion of their PEG-INTRON royalty asset. All in all, the company remains strong and continues to see growth and stability in their marketed products. Unfortunately, the volatile external markets impacted the ability to complete the sale of their specialy businesses at this time, however.

The strategic transactions that Enzon is already undertaking represents an effort to unlock value while many of its shareholders also continue to explore ways to maximize their investment. The result has been a stock in decline so far but opportunity in the near future. Shares of the pharmaceutical firm rose $0.08, or 1.86%, to $4.38 per share on the day.

Related Companies
Nektar Therapeutics (NKTR)
Gilead Sciences Inc. (GILD)
Johnson & Johnson (JNJ)

Mark-to-market accounting is a term that has received a lot of press in recent months as toxic securities seemed to come out of the woodwork. The idea is that companies holding illiquid securities should sell a few to get a fair market price and then value their portfolio at that value rather than an "estimated value" or "last trade value". The big debate now is whether or not mark-to-market accounting is good or bad for companies, investors and the general public.

The SEC announced today that it would hold a November 21st roundtable concerning this mark-to-market process. The first panel will focus on:

• Usefulness of mark-to-market accounting to investors
• The sufficiency of information and the ability to improve the reliability regarding the valuation of assets recognized at fair value that do not currently trade in an active market
• Challenges encountered and best practice used by preparers of financial statements related to estimating fair value during the current market conditions
• Whether there are aspects of the current fair value measurement accounting standards that are not sufficiently clear, and if so, what are the areas that could be improved and how
• Whether there needs to be more education related to fair value measurements
• Challenges that auditors have faced and best practice employed in providing assurance regarding fair value accounting
• Ways to increase transparency and consistency in the application of impairment models for investments not held for trading purposes

The mark-to-market represents a major problem in the marketplace as illiquid trading may cause securities to trade well below their intrinsic valuation. For example, if a mortgage security is rating AAA grade and expected to come to value in 30 years, but no credit is available for investors to purchase mortgages then nobody will be willing to pay any price for them. As a result, marking them to market may cause an unnecessarily low valuation for a security that may really be worth much more. However, others insist that the only real value is the market value and as a result this is a very fair way of doing things.