While folks who bought the stock at 14 may be rightfully upset, the rise in the stock price (probably as a result of the Seeking Alpha article) helped time the sale of 6 million shares (a large amount for this size company) albeit at the discounted price. Had the price not jumped this week we might have seen the floor at $9 or lower. This cash is great for the company. I had been concerned that we were under-capitalized. Now we have plenty of cash to implement the business plan aggressively on all fronts and in a timely way with less cash constraints. This transaction is great for the long term. I don't care if we trade at 14 this week. I want to see us in the 20s or even higher in the next 2 years and the cash will help bring our scientific investigations along-- adding real value to the company.
I am a believer in Compugen, but i disaggree with your statement- nothing is fine!
That was a very bad style! IMO
1. They did not inform preventive the shareholders about their plans
2. They did not give the old share holders the chance to buy this shares!
2. It is dilution
3. Based on their own deal, the share price should be below $ 9.
4. For what do they need the money if their business model (selling candidates in a early state and move over the whole risk of product development and FDA/EMA approval to others) if this business model is really working. Specially if only 1 or 2 other similar deals are needed (their own statement)
The market cap of the company was 50 million dollars higher before they sold the new shares. They would have been better off just to give the 6 million new shares away for free. Now the 6 million new shares are valued at zero, and the market cap of the company is still 50 million dollars less. The brain trust running this operation might be good at medicine and science, but they are lacking in simple arithmetic skills. Too bad because this little mistake cost shareholders over 100 million dollars.