Seems like everything I read in the earning call transcripts was true. They are out of money. What happened to the 60 million in senior notes? The 10 million development agreement? They burn faster than they can raise. Now they are attempting a last ditch effort by offering more stock when all they have done lately is destroy shareholder value? Essentially trying to finance during a deep recession characterized by frozen credit. Then you take into account their credit rating which amounts to what last night's mexican food was in my toilet this morning. Logic dictates this company will fail.
Watch for the stock to drop below $1, then inevitably delisted. Once its delisted in a year or so, someone that wants to make a cheap take over wont have to follow the same listing requirements, so no rally because someone had to disclose significant accumulation. This assumes they even survive the year it'll take to be OTC status. Not a question of whether or not they'll fail, just how? Too bad Scottrade doesn't let you short companies priced under 5/share.
All good points and the 1.8M shares short suggest that others share your views. However, the very fact that this company succesfully raised $48M in this environment suggests also that there are well-informed providers of risk capital who believe that this company is worth funding for a second life. I concur. Now with the dilution and funding overhang removed, investors can look forward to a steady stream of milestones as management is unencumbered to execute on their srategy. If their products have legs, this stock will soar.
That's almost half the current market capitalization. After the expenses to the underwriter thats enough cash for what? another year? 2007 burn rate was 33 million. Haven't seen the numbers for 2008, guessing around 20 million maybe since they've cut expenses and dont have to spend money on clinical trials (the development agreements took care of that). So maybe they have enough for 2 years. They might make it. The new ceo cracked the whip and made alot of progress, unfortunately I think he came in to late.
I applaud Gregg for forking up almost 500k of his own money for a chunk of shares, but honestly, the guys a gabillionaire, that's pocket change. Not really impressed (maybe the board told him he couldnt buy anymore, i dunno). Look what the CEO of Sandridge Energy did, he shot himself in the foot, but a bold move nonetheless. I've heard Gregg on a couple CCs and at a couple seminars, I can tell the guy really believes in CGMS as a technology and what it can do, just not convinced he believes in Dexcom. Cant blame him, hes a smart business man.