is that if they have a product that fails the shareholders get to eat the disaster and loss. If the product proves to be successful the company will be sold for about 30 cents per share to another company with the all of the officers and BOD getting positions in the company doing the takeover. The BOD will make it look like there is no other choice and that 30 cents per share is a gift to the bagholders. Somewhere down the road the company will be taken public again a around $10 per share or better. I've been throught it before.
plc is a yukon based company,has a poison pill to the best of my knowledge that prevents a scenario to convey............bank of America,just sold preferred shares to Buffet which at 1st was rebuked by bac but i bet bet W.Buffet will not beable to execize to buy the shares by converting his prefer shares.boa will pay back buffet b4 then
While anything is possible, given the structure of the latest financing round... not so much.
The outstand common stock owned by us little guys will become < 45% of outstanding when the convertibles are excercised. After the .15 strike options are excercised we are looking at only a < 25% ownership. Which means (IMHO) the 500lb gorrilla has everything to gain by MAXIMIZING the price per share prior to making any sell-out deals.
We now know beyond a reasonable doubt that the product works. Our biggest risk is management execution, followed by copy cat products (did you see the "Hi-phone 5"), followed by macro economic factors retarding the adoption rate, followed by the thing having some unknown side effects that will get exposed in clinicals. Could we get jacked in the end if we hold too long -- you betcha'. But first we'll see a substantial and rapid run up, which may go to several dollars a share, where I'll be happily selling ;-P
I doubt if you will see anything close to a dollar. The entity that owns the largest percentage of shares will offer to take the minority interest private at a substantial discount to it's true worth. Even if there is a class action suit, the minority shareholders will receive nothing above the offer price. The judge in the case will simply rule that everyone voted and the majority accepted the offer. Case closed. I refer you to the class action suit for Netsmart Technologies, MTS, ScottishRe and many others. The minority interest is cheated out of the lion's share of the profit and the courts uphold the vote. On the upside, these shares can be had for 15 cents and you may get 30 or 40 cents down the road, for a double, IF the company has a successful product.