Trius Therapeutics, Inc. (TSRX) Message Board
-
Share Price After Dilution
I'm new to this stock, but it looks like a good time is approaching to enter it, especially since the Repubs will push off the debt ceiling to late spring. It looks like new share price after dilution should be:
previous shares outstanding: ~40M
new shares outstanding: ~46M
increase: 15%
previous price: 5.25
new price: 5.25 - (.15 * 5.25) = 4.47 (which is almost exactly the underwriter's price)
I'm wondering how the underwriters can get $4.75/share by 1/24 (closing date)? That is a premium above what the stock had been trading at. Normally offerings are priced below the current price after taking into account the additional shares, except when a run-up is expected, but then the closing date is usually farther into the future.
I'm trying to figure out a good entry point. Comments?-
bump.
-
Your calculation has one error. It ignores that the company, after the offering closes, has an additional $25 M in cash or a little more than .50 cents per share. So your 4.47 would be $5.00.
Sentiment: Strong Buy
- 2 Replies to the_emerging_analyst
-
The public shouldn't attempt financial analysis. Apparently it is beyond them.
-
Yes... you're right... I forgot to add back in the increase in the overall book value of the company after 1/24. That makes more sense and is probably why the stock price is where it is right now.
-
Recent trading range is taken into concideration when pricing any shelf.
Institutions are buying shares and the MM's/underwriters are going to be holding shares in their own accounts. You will see larger blocks sold at much higher prices than $4.75.
So get a HOT slice before their all gone under $5
cold- 1 Reply to coldpizza22
-
I'm hoping to see 5 - 10% before reporting of top line results of the phase III trials. Sound plausible?
-