"As a result, it was the Staff's belief that, pursuant to the Nasdaq Listing Rules, the Company was not permitted to issue 20% or more of the Company's outstanding common shares ...
Following communications by the Company with the Staff, on October 12, 2012, the Company received a Letter of Reprimand from the Staff ..."
I observed at the time that we were entitled to expect Management to have a basic awareness of the underlying principle. They should seek our approval for transactions likely to dilute our ownership by 20% or greater.
But such is their arrogance that the response has been a compound dilution of 44% at an average price of $7.05 - via two transactions in nine months, engineered so that they wouldn't have to seek our approval for either.
Any guesses as to what might have happened to the share price if those investors instead had bought even half of the 13 million shares on the open market, during the same nine months in which an additional 5 million shares were bought by the Russell 3000 tracker funds?
Who here would have voted in favour of even ONE premature dilution - after the Company assured us in July last year that the $20 million raised in the Hercules dilution would "extend our cash runway well into 2014"?
All of the following have attacked me for calling for a SEC investigation into the insider trading -
With regard to that statement by hubby - if there's anybody at all here who hasn't long ago dismissed him as a useless windbag, please feel free to ask him yourself for the reasons which supported such a confident prediction.
It should go without saying that anybody with a basic awareness of valuation is likely to have put his prediction down to a complete ignorance of valuation.
I think a more accurate statement for me is I'd rather not waste my time. It is what it is.
Since you are raising such a stink about this, might I ask if YOU have contacted the SEC?
If so, would you be so kind as to share your comments? If not, would you also be so kind as to explain why not?
PS - for what it's worth, the way in which the dilutions were done...sucked. I think had they asked permission, they were afraid it wouldn't have happened. Sometimes it's better to ask for forgiveness than permission.
Additionally, even with the dilution, if one could back it out...and we hit $1,200 based on your very own price target some time back...we would still be looking VERY sweet.