GALE new stock offer : 17.5 Millions at 2.00 and .33 warrants at 2.5
By Mark Lawson | More Articles
September 13, 2013
Galena Biopharma, Inc. (NASDAQ:GALE): Current price $1.90
Galena announced Friday the pricing of an underwritten public offering of 17.5 million units at a public offering price of $2 per unit, which should result in gross proceeds of $35 million. Each unit is comprised of one share of common stock and a warrant to buy 0.35 of a share of common stock at an exercise price of $2.50. The warrants are immediately exercisable and expire on the fifth anniversary of the date of issuance, while shares of common stock and warrants are immediately separable and will be issued separately.
Galena is a biopharmaceutical firm centered on developing and commercializing innovative, targeted oncology treatments through which to address important unmet medical needs to advance cancer care.
Gale can be expected at 4 to 5 soon with 100 millions cash
After reading this I still am having a hard time understanding exactly what this means. I see they are offering a common share and a .35 of a share to be exercised at 2.50? Can someone with more knowledge please explain.
Exactly that - you get the shares now + an option to buy more at $2.50. Of course you would not exercise your right to buy it unless it was significantly above $2.50 (sometime in the future). I dont think the warrant ever expires like a call option - unless of course the company does. I suspect you have to call your broker to express interest in getting in on the deal, Depending on how its received and the bucks in your account , you may or may not get some. Usually there is a market for Warrants - right now they are valued at 7 cents.
I warned the board this was coming several times by Ahn's own words. Hopefully this will fund them for at least a year. Seems like the PPS will be capped by this for at least three weeks. I don't see any reason to be a buyer till then unless it drops to $1.8 ... then I would be a buyer again.
There is of course a risk it will be undersubscibed and they have to reprice it, but I doubt it - unless the market tanks and or they are more deperate for funding than we think.