They are in the process of selling more stock to raise money. It is coming and only after that price will stabilize and go up. My guess: $2.32pps.
You didn't check the facts.
30+ million shares were issued in the 1st Q. Total number of shares outstanding went from roughly 101 million to 132 million.
Exchanged those new shares for about $60 million in long term debt that XOMA owed. Exchanged them for about $1.90 per share back then. Go check out the company's press releases earlier this year.
All the shares were issued then, not now or in the near future. Some of those new shareholders decided to sell in the last month and take some profits. And there was not enough buying interest to keep the prices from sliding. So what?
Read the Q1 report yourself. New load facility of $35M at the rate of 10.57%. Tell me it is not long term obiligation of $46.823M dollar in total.
"On November 9, 2006, XOMA (US) LLC entered into a five-year, $35.0 million term loan facility (�the facility�) with Goldman Sachs Specialty Lending Holdings Inc. and borrowed the full amount thereunder. The loan is guaranteed by the Company. Indebtedness under the facility will bear interest at an annual rate equal to six-month LIBOR plus 5.25%, which was 10.57% at March 31, 2007, and is secured by all rights to receive payments due XOMA (US) LLC relating to RAPTIVA � , LUCENTIS � and CIMZIA� and other assets of the Company. Payments received by XOMA (US) LLC in respect of these payment rights, in addition to a standing reserve of the next semi-annual interest payment, will be held in a custodial account which is classified as restricted cash. This cash account and the interest earned thereon can be used solely for the payment of the semi-annual interest amounts due in March and September of each year and, at that time, amounts in excess of the interest reserve requirement may be used to pay down principal or be distributed back to the Company, at the discretion of the lender. XOMA (US) LLC may prepay indebtedness under the facility at any time, subject to certain prepayment premiums. XOMA (US) LLC is required to comply with a debt covenant determined by the ratio of royalties collected to interest payable. Proceeds from the loan will be used for general corporate purposes.
At March 31, 2007, the outstanding principal amount under this loan totaled $30.3 million and related restricted cash was $1.6 million. Debt issuance costs of $1.5 million are being amortized over the five year life of the loan and are disclosed as current and long-term debt issuance costs on the balance sheet."
You hit on a strange fact that is in direct contrast to the entire market. The market is decreasing shares and Xoma is increasing them. If you go by normal shares that traded before the dillutions years ago Xoma's price will not hold. Eventually it will get valued by shares, debt, earning, etc.. The market has been driven up by big cap share prices and the reduction of shares, the global economy, and what you figure the dollar is worth. Right now the dollar is worthless. That is why deals for 30 billion dollars are normal. The minute the dollar is worth something these deals will fail because they can't pay the debt. If a company needs to sell because of the 30 billion deal it may be under what the share market cap is valued at. What you get is boom! If you value the dollar at what he deals go for you are talking about an inflation never before seen. I wouldn't tell Bernaki about this. Now the stock market is like the housing market. You can buy your stock and finance it at this price but you have to figure what it is worth if you sell. I would love to sell my $65,000 dollar house to a foreign investor that wants to pay 150,000 but I doubt that that is going to happen. If my house is worth 150 thousand then I will be paying 2.30 for a dollar loaf of bread.
>>>They are in the process of selling more stock to raise money<<<
I notice you're merely repeating yourself and not answering my question. What is your source of information?
I am skeptical of your assertion because rules of full disclosure require Xoma to disclose stock sales.
If you want to act like an ass go ahead and repeat yourself again. I will understand.
Unless of course "THEY" is someone else other than Xoma. Of that I would agree.
It is writing on the wall. As of last quarter, They had $35M in the bank with $46M debt and they are burning at north of $10M every quarter. Tell me they don't need money. The drop from $3.5pps started a month ago. The deal can come anytime and they need another $60M or more this time for two years of cash. We are close to bottom now and I am waiting for the news (and drop) to get in. That is my two cents to XOMA.
The same crooked deal happens with many of these microcaps (see the sad history GNTA). Hedge funds get wind of an offering and short/sell the stock. We get hit with an early morning gap down of 10-20% after the offering is announced.
I believe Xoma's phage therapy has promise, but will wait for the hammer to drop before pulling the trigger.