If you are not a short term trader, then this is a non event and may be an opportunity for longs to buy cheap stock. As the new Rodman report states, we will know if Synta is a 10-15+ per share in several months when new interim Ganetespib data is released. Also, you can bet Jefferies did significant due diligence before agreeing to lead an underwriting. My guess, this deal gets done between 4.5 and 5 per share, barring any positive news in the short term, and brings in new sponsorship for the stock. Then we wait for the GALAXY results in Q2. I know all the risks, but I am long, and will accumulate more if there is any secondary weakness. I think Ganetespid will be approved and attain multi billions in annual sales. If wrong, I take my lumps, and move on, a little poorer.
Hailstorm, I must disagree with you. If the GALAXY interim data is positive, I think this stock will rise sharply. Even the Rodman report says this stock could double or triple very quickly. If the stock is 15 per share in the spring, I could care less about dilution now or in the future. Also, I respectfully disagree that dilution is a bad sign. In fact, we all know it's commonplace for small, cash burning biotech's, to dilute along the way. These deals can also bring in more sponsorship, recommendations etc. If Synta's business plan is as obviously dire as you state, no way does any bank put their name on a deal. Do deals go bad after offerings? Sure, it happens, especially with small caps. That's why you do your best due diligence. Synta is a speculative bet, but I really like my risk-reward chances now. That' why I was hoping some bears would provide a strong scientific rational against Ganetespib, above and beyond the normal clinical risk of any trial. Thanks.
..."you can bet Jefferies did significant due diligence"..... You are aware that Jefferies sold 600 million of MF Global bonds--3 months before MF Global blew up? Some due diligence there. Never assume that someone else has done the hard work.
Good point, but small bio techs can never have enough money. In this crazy economic environment, financial markets can freeze up at any time and no deal gets done even with great results. When the markets locked up a few years ago, there were absolutely no financing deals getting done, including bluechips, auction rate securities failed etc. If the market is there for them now, they should take the funds.