If institutions don't need to cover and they just deliver owned shares when the times comes, who is really left tobuy? It is a quandary that has kept the stock in modest trading range and the mangement seems to care less despite their public pronouncements to the contrary. As much as I hate to admit it, we are in a low win (no win) situation until we are either taken over or MMM is ousted by some shareholder firendly management.
Re: selling secondaries vs. shorting and covering:
Institutions have their secondary shares as a source of protection as they short and cover periodically. Outright selling the secondary would be foolish as it would liquidate this low cost basis long position and their insurance for future short raids. Fewer non-institutional investors will make this harder going forward though. Colfax has also claimed that this is meant to reduce the cost basis on their convertible notes as they collect the interest, waiting for 2019...
Re: conversion of debt:
I'm probably wrong about this ever supplementing EXEL revenues before significant commercial sales: according to the press-release, these notes are convertible only in 2019, although there are clauses which allow for their conversion as early as 2016 (what they are is unclear). I imagine that if EXEL will ever have a franchise going, it will have built up before either of those dates.
Non-institutional investors are going to be slowly lured back in. The deal isn't so bad as the only reason you'd short then cover with secondary shares instead of flat selling your secondary shares is to buy into the convertible at $5.31 so MMM is trying to guarantee some minimum attractive selling price for institutions in the long run despite the short term fluctuations. Redemption of these convertibles is going to keep the company's bottom line stronger well before any strong revenues are realized.
the shorts have been right for years.I know zilch re bios but still listen to cc's After last one i said to self no reason to buy stock listening to MM.I also stated if he out stock would rise by 10% so how do we get rid of him