A little clarity and some rationality behind the ATM
I am not saying that there wont be some knee jerkers out there panic selling today or the the next couple of sessions. But the simple facts are that ATM's on low floaters is a good thing. The very act of going with an ATM over a traditional secondary shows a strategy and that major dilution is not going to affect the stock price like a typical secondary. Why? Simple as the ATM allows the management to sell at the market to raise more capital, so would the management team be better off selling this morning at say $.55 cents per share or wait until they release profound news and sell at the market for $1.55 per share. Hummm even some of you idiots can do this math, yes the $1.55 affords the managment team a higher value for that sale. Yes dilution is a part of the equation no getting around that, but the introduction of $2.3 million worth of additional shares after the stock price rises 100+ percent is of no real concern.
You see in most cases ATM's are designed to give complete control to the authorizing entity. DARA can start or stop the program of introducing new shares at there call. Further the ATM's provide the company with an avenue to raise funds when the share price is higher, and who knows better than the company of pending news that will indeed drive the SP higher. ATM's were introduced in the 1980's and have been a "legall way" for companies with pending good news to register the terms of a sale, deliver good news, wait on the SP to rise, and then offer at the market sale of the shares at a higher value, thus raising more capital than a standard secondary offering which dumps a set amount of shares at a set price, thus dilution 101. No folks this ATM will be desinged to raise capital at a much higher level than $.55 cents, so my hats off to the DARA management team as this ATM is a calculated move to benefit the long term survivability of the stock. Now let the good news role and relaease the Kracken Dave..... Mitch out.
ATM's are great. IF USED PROPERLY! Management here clearly knew they were running out of funds and doing this ATM at this price not only hurts their stock price, but their all out honestly with shareholders and their integrity. If DARA is cracked up to be all you blow-hards say it is, then these offerings should be scooped up by large institutions in a matter of minutes. Why? Because big institutions are like big pharmas.They sit and wait on the fence perch looking for an opportunity. Let's see how many come in a scoop up shares are fly off to another fence line :) Sorry, but I believe it's going DOWN!!
Mitch.. you intentionally masked the bottom line. ATMs are for future use, not today. Its a very clear direction that secondary is not going to happen in future. And, next month's big catalyst on ODD is there..