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Dendreon Anonim Ortaklik Message Board

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  • Minn_sea Minn_sea Jan 21, 2004 1:45 PM Flag

    No Dilution


    Seriously, this is a dilution. Perhaps you feel you have the same percentage of book value of the equity. But, your ownership percentage of the company is reduced by the proportion of the dilution.

    To keep your same percentage ownership, you must by more shares. In this case (17.4% dilution), if you own 100 shares, you must buy 17.4 more shares to keep your percentage ownership equivalent to pre-dilution levels.

    True, there is more money in the treasury from the sale of the shares, so you own more "book value", but you still own less percentage of the company. Even that book value is diminished by the cost paid to the investment bank to make the offering (10% - 20%).

    Is dilution necessary in an early-stage biotech? Yes. Was the offering timed well for DNDN? Yes. Is it still dilution? YES.