I knew they were going to have to raise money and raise it soon. I did think they would wait for news though. I know many people thought they could wait until the third quarter. No company would ever burn through all their cash and then try to raise money, you could end up out of business doing that. If you look at Inovio’s past, they have always raised money when they had around a year of cash left. So this gets them through 2014, enough time to do a deal and another deal on the HPV trial moving it into phase III. So from that standpoint we are in good shape. The company probably doesn’t have to do any further financing due to it being able to raise money from doing deals. So, why raise money now? There is an explanation for everything. I got to thinking about it and this is what I came up with. Say there was some good news on the HIV front from a peer reviewed publication, maybe some flu news and then Chrontech came out with good Hep C news. If we did a financing after that, the price would get beaten down in that scenario as well. My thinking is they wanted to get this out of the way so that if we get some momentum in price due to the milestones listed above, we don’t lose it due to a financing. That is what happened with Marxe. The company had just started to get some good stock price momentum going from good news, then did a financing, and that killed their momentum. Right now we have a higher low in the stock, so the uptrend in the stock is still intact. If we can get some news in the near future that looks good, we can resume the uptrend and that uptrend will not be pushing into the headwind of a possible financing. If we had gotten to a buck or more with Chrontech news and then did a financing, who knows how that could have hurt the forward momentum. Right now we still have things coming up that can push us through a buck. Chrontech, HIV, Influenza and a possible deal. Once we get through that level, we are golden and will keep going.
They only thing that would make me feel good about this offering is if this was somehow related to a potential partner wanting a chunk of Inovio prior to making a deal. Selling a huge chunk of your company just to survive another year doesn't make sense to me.
Thank you bb for another sane, intelligent post. Another good thing is that if Marxe had any remaining shares they were going to sell, they sold them today. I think we may now be confident that Marxe is out of the picture.