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EnteroMedics Inc. Message Board

  • okietulsa123 okietulsa123 Mar 18, 2010 9:42 PM Flag

    Reverse split

    Looks like they will be voting on a reverse split here very soon. That should meet the NASDAQ requirement and get us over $1.00. Aside from that, I don't have enough experience to know if a reverse split is good or bad...?!

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    • Oh ya thought the Board should also try to remember all of the other investors they enticed at $1.15, amd the one who bought at 80 cents, then one at 65 cents.

      for proof look to T. Rowe Price who some would consider a large institutional investor (does the Board remember them) who purchased shares of ETRM @ $1.15 a share when they felt the risk-reward ratio was in their favor. T. Rowe Price did not shy away because the share price was not over $5, $10, $20 as the share doesn't matter to anyone but the listing on the NASDAQ market.

      The problem may be for the Board is with the so little confidence the market now has in the management team that without a reverse spilt after they include a discount from the days offering share price (along with the bonus warrents they will have to offer) there might not be any pennies left in the price of share of ETRM's stock.

      What a fine mess you've gotten us into.

    • The approval of the IDE could well come during the timeline you reference. This is not something the market will perceive as an accomplishment as the FDA really has no problem allowing such an IDE such as this so long as there have been no adverse safety issues and in ETRM's Empower trial there were no safety related issues.

      On the Capital offering the company will need to do one or more. Look to the cash on hand versus the R & D expense lines when Empower trial was ongoing for proof.

      Now the company who failed in its study, a company, a board who did not consider capital needs when the share price was at much higher levels ($4, $5) when the potential of good news was in their favor are asking their share-owners to give them a broader authority to do at a time of their choosing a reverse split which will do nothing other than meet some arbitrary guideline set-up by the NASDAQ market. How can a company whose management teams has exercised such bad judgement (study designs, cash needs) ASK FOR EVEN GREATER authority? Judicious share-owners in situations like this typically do one of few different things, leave the investment, replace the management team or Board members, or limit the authority of the Board not broaden it without a valid reason. The Board in proposal number 2 reverse split infers THAT PROBABY market makers will recommend ETRM to their clients because the share price is higher. This is not a valid reason. No matter what the Board infers this is not the case, for proof look to T. Rowe Price who some would consider a large institutional investor (does the Board remember them) who purchased shares of ETRM @ $1.15 a share when they felt the risk-reward ratio was in their favor. T. Rowe Price did not shy away because the share price was not over $5, $10, $20 as the share doesn't matter to anyone but the listing on the NASDAQ market. I'm not saying here the investment decision was the right one for them I am only saying the stock share price did not influence their decision to invest. If a investor is private, a hedge fund, a mutual fund, another type of institutional or individual and they see an opportunity to make money they will invest no matter what the price, BUT because they have confidence in the technology, confidence in the management team running the company, and in the companies Board who oversees the management team. It will not be because the share price is at 50 cents or $50 a share.

      On hope, the companies hopes, investor hope will not accomplish what this company needs. ETRM will get an IDE approval from the FDA to do another study. The company will at some point need one or more capital raises, but to raise capital the management team needs to be able to articulate a message beyond theory on the failed study, explain WHY they believe the new study design will prove that the technology works and WHY that they have the skill to bring the technology to market.

      Look at other companies who believed a reverse split would help them and you will find very few instances of a benefit realized. Those who succeeded did so because they proved that their technology, product was something that was marketable it had nothing to do with what their share price was. Unless the management team and Board start to place their focus in the correct areas the share-owners may need to vote NO on Proposal number 1 approval of the Board of Directors as well as NO on proposal number 2 the reserve split.

      The next trial may well reach its endpoints and the company may create a double, triple, quad, or ten bagger on a speculative investment but the odds are based on what has been articulated to date by the company the result can not be expected to be different than that of Empower. It is managements job to convince share-owners and prospective investors why a different result will be achieved and in achieving that result they will provide their investors with returns as I mentioned above.

    • 3:12pm ET: 0.5_313, (0.0187), (3.40%)

      Old Time Walios Frog Pond Cafe / Taproom, WidenerU, Hockey!!!!!

      CF,NTA, RevAdjusted: $$M (44), (1.4206) Per Share.
      Current Price: 0.5500
      Price Target: [1.] 0.4780 (0.0720), (13.09%)
      Price to Scheduled Amounts: [2.] (0.336_471)

      Strike Price: [4.] 0.5903
      Spread: 0.112_300
      Historical Trading Range 2010 to Date: [5.] 23.5%, 23.5% Annualized
      Short Interest / Shares Short: [6.] 1.21 MM
      Percent of Tradable Float O/S: [7.] 3.93%
      Annualized: Revenue Only to Shares & Price to Revenue /Sales: 0.0001M, [8.] 0.0001M, 0.00000318/Share, 150,098.404PriceT
      Business Intelligence Issues: [9.] (24.07) $$M, (0.781_513)
      (0.611_634)PriceT

      1 NZD = 0.471910 GBP

      [Noted:1 GBP = 2.11_905 NZD:Noted]

      Adjusted split to $1.00 / Share, does not change much except [9.]PriceT:314,013.398.
      The story is not much different.....

    • It is my hope that we get the FDA approval in about 20 days or less...

      If that happens, and they DON'T do another offering to raise capital...

      Then the stock might actually hold over $1.00 and they might disregard the vote and reverse split..

      that is my hope anyways.

    • A reverse split is NEVER a positive. It is a perception thing nothing more. It does nothing to change the fundamentals of the company. The company would be better off falling to the NASDAQ pink sheets.

      Reverse Stock Split - a 1-for-2 reverse split means you get half as many shares, but at twice the price. It's usually a bad sign if a company is forced to reverse split - firms do it to make their stock look more valuable when, in fact, nothing has changed. A company may also do a reverse split to avoid being delisted.

      Delisting - The reasons for delisting include violating regulations and/or failing to meet financial specifications set out by the stock exchange. Companies that are delisted are not necessarily bankrupt, and may continue trading over the counter.

      If ETRM were to do so it would be a desperation move on their part. It would reinforce to educated investors that the company is only concerned in ancillary fixes and is not concerned in fixing the root problem that forced them to be in position to even consider something such as a reverse stock spilt.

      I hope this is just speculation on your part and will not become a reality.

 
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