I think management has handled timing of this secondary offering perfectly. The company needs money to fund R & D and continuing operations. What better time to sell stock than when at record valuation.
On the heels of the offering, they announce going into Phase III trials on next drug in pipeline to recover loss to dilution.
I predict more good news at next earnings announcement on Rituxan sales. Morgan Stanley, Montgomery would not want to take out this offering if there was disappointing news on the near horizon.
You are correct...I was over zealous in calling the breakout. Early Monday, IDEC did break into new high groud on heavy volume. That is when I made my post. From a technical viewpoint it looked good. As the day progressed, the new high did not hold up and the profit takers jumped in driving the price down. I guess that is what you get for reaching conclusions before all the data is in. As a long term investor in IDEC, I really do not care when we do breakout. It would be nice, however... It appears now that it may have actually been a blow-off. Anyway...I am still fully committed to this stock, especially after reading the 10-K.
Contrarian.....what is your definition of breakout? Based on the performance today, did you really mean breakup? What's happening....huge volume increase and 2 point decline? Please give your thoughts. Thanks
I'm wasn't saying that the offering was a bad idea, if used correctly. What I was complaining about was that there was no explanation what so ever as to what it was to be used for. I think the company has great potential (ie. new phase 3 trials)but they shouldn't get arrogant and blow off investers should be told why they've been diluted by 10% and why it's a good move. You realize they now need to beat estimates by 10% just to meet them.
IDPH is smart to be going for this money now. They have plans to build this company into a powerhouse. The very fact that you are concerned about dilution is a testament to their success. In developing biotech companies cash is king. IDPH is not yet at a stage where it can finance its programs internally.
The company is not blowing off investors, it is doing what is right for the long term investor. This finacing is like a vaccination, a little pain now for the opportunity to avoid serious disease later on. Since I am not planning to sell any time soon I applaud their decision to raise more money.