As I understand the deal between ulgx and edap,edap the co. still exists after selling 1 product line. The price ULGX PAID FOR THAT PRODUCT LINE MERELY REPRESENTS A WILLING SELLER, WILLING BUYER AGREEMENT. The effect of the deal imo will enhance ULGX and may help EDAP become a more viable co. down the road. ULGXLONG
ULGXlong, I realize that ULGX did not purchase EDAP, only EDAP's major product line, but that still does not explain why EDAPs value has not increased by the $20 m in cash and stock, at least in terms of stock price.
One explanation is that the market is inefficient and people do not realize this, but I try to resort to this explanation only if all the others don't pan out. Some alternative explanations... just guessing:
1. EDAP stock should be worth at least what ULGX paid divided by the number of EDAP shares... over $2 per share.
2. Investors think that EDAP will waste most of the $20 million instead of returning it to shareholders (buy back, etc) or putting it to good use. This assumes that EDAP will not be bought out with a value of $20 and at a price based on market cap based on stock price of $8.
3. Although the press releases by EDAP and ULGX seem to indicate the ULGX paid $20 mil to EDAP, this is somehow not true (?) and the money is going elsewhere, or restricted in some manner in which EDAP shareholders will not benefit.
What do you folks think? (1), (2), or (3)? Or none of the above?
EDAPY has 7.79 million shares outstanding according to the Yahoo profile. $20 million divided by 7.79 million equals $2.57.... and EDAPY has more products in the pipeline. Book value before the deal is $1.56 per share. After the deal, it has to be a minimum of $2.57 (unless ULGX price drops). Volume in small stocks has been very low lately. As soon as investors wake up and start looking again, this stock will quickly move above $2 and should be trading above $3. (IMO)
Good Luck to All, small_cap_tech_watch Penny Stock Investment Club
My conclusion, fwiw, is patience will be required. I expectation this procedure will do exceedingly well and that edapy<the company> will benefit from it. In terms of your proposals, I would expect that there are some restrictions on the sale. imo.