New Shares Issued…BUT at higher share price than previous close
Honestly, I’m not sure what to make of this. Unilife has issued another 2,048,935 common shares at $3.06 per share to raise $6,087,248 (net) in working capital. This is a 14 cent premium over $2.92 close on Friday.
Well, at least the cash-crunch can has been kicked down the road a bit longer. I’ll be surprised if the big announcement happens this week. Why someone pays a premium for the shares still baffles me, especially with all the short interest. Nonetheless, I suppose it is some comfort in the mist of pain.
Think about. it. Why would they sell shares days before the big announcement when they could sell the shares after the big announcement when the shares are going to double? CONTRACT IS NOT GOING TO HAPPEN, or its not going to be as big as CEO bragging about.
The company announcement was to BOOST the share price up so they could SELL THE STOCK via the ATM.
I'm SELLING ALL MY SHARES AND GETTING OUT. Something is fishy here and I will see the shares cut in half to $1.80+
The contract is big enough to make Unilife a leading prefilled syringe supplier. They currently have exclusivity agreements with Sanofi, the largest vaccine producer in the world to which the majority of syringe business is to Becton. Once Sanofi executes a commercial supply contract, a very large portion of Becton's business will be moved to Unilife. Unilife's product is years ahead of the current leading suppliers. I'll provide an example, Becton D just acquired Safety Syringes to fend off Unilife and Retractable go to their website and look at their products. They currently use a protective sheath and one hand activated needle covers which still = X% of needlesticks/year. There are studies & health care evaulations showing that a retractable needle means near 0% needlesticks/year. Where do you think insurance companies will stand on this? As well, Unilife's patents protect their syringes for a very long time forcing generics and large pharmas to bid up the value of their syringes. They have a solid business model and this is a high barrier of entry type model. This is a growth stock and will triple in time.
karl - I saw that price too, so it's Cantor's valuation that UNIS is north of $3. Go into the company's website and look through their company material, you'll find the supply contract value. Calculating for PPS it should be around $5.50-6 post announcement depending on X years (I used 7 years because Unilife consistently refers to more than 7 years as long-term). I haven't included short covering, but with the % on this small float it may rise to $6-$6.30, because the remainder held by institution. There's a bolus announcement that's coming this year as well so that's not priced in, right now too speculative for me to price.
That was done all prior to telling us the news of selling the shares. They have pumped up the share price with possibly FALSE info and news about a "big contract coming" so they can sell the shares at a higher price.
If the contract was in a few days WHY WOULD THEY SELL THE SHARES NOW at this price?
Once news of the contract comes out AND IF it really is that big then they would sell the shares to raise the money at 3 times the current price, right? MAKES NO SENSE.
You need to think this through.
STOCK IS GOING TO DROP and you will see it happen LIVE in front of your face.
I've been thinking about the timing of the sale of shares and the premature contract announcement for a couple of weeks, and it got me to sell all my shares last Monday. So far it has been a good move. I'm behind this company long term but I really think it could go to $2.50 this week if the contract is not announced and EXECUTED.