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Derma Sciences Inc. Message Board

  • zwerp2000 zwerp2000 Feb 11, 2011 7:09 AM Flag

    A follow-up to my post about dilution

    a few did not agree with me about issuing stock to raise money. if you watch the video below, the ceo states they may give up some of the rights to their drug because they don;t want to incur the $15 million in phase 3 trial costs. Well, for me, i would rather they issue at least 2 million shares to fund it themselves so they could keep 100% of the rights of this drug. There is a misconception about dilution. It's not always bad. Sure, there are companies like CTIC that dilute like there is no tomorrow but there are others who do it in a way to make the company stronger and not destroy shareholder value




    http://www.ustream.tv/recorded/7994431

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    • wow, you're ignorant. i am pretty sure you are uneducated trash.

    • I think the disagreement is more about the timing rather than whether they should. I think they will do it in the $20s to minimize dilution and also get a better deal with a partner in 2014. Have the cake and eat it too. Any guarantees we will hit the $20s? There are no guarantees in life but with all the things going for DSCI right now, specifically the non-existent float and increasing short position in the face of past and impending good news, and an analyst upgrade, it is as close to a guarantee there is on Wall Street. Smart management will take advantage of the RS they executed last year (to make the OS and float so small) and reap the benefits soon. Makes no sense to do it at these prices and dilute by 30%...

      • 2 Replies to betasplen1
      • beta, if they wait until $20, great. that will be even less shares they would need to sell to raise money to fund phase 3 trials. of course it is always difficult to time highs and lows so i guess it's up to management to decide. at this price level, something joejoseph doesn't seen to grasp, the company has the luxury of raising capital with very minimal dilution. this will allow them to keep 100% of the product without have to give some of it away so they could fund phase 3. this is great for the company imo. when you listen to that conference call link i posted, the ceo stated they would need to partner to fund phase 3 which would mean giving away part of the product royalty. of course that was when the stock price was much lower. now that it's higher, things have changed for the better for the company.

      • Like i stated previously, any M@ron who suggests it is good for shareholders when a company dilutes their stock is ..... well, very simply, a M@ron. There are investor neutral means of raising capital and dilution is not one of them. Go back to school chum. U obviously are less than astute.

 
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