GM Deme....Do we care what Eskela does? Not sure why you would think a name change is an issue. ACTC has so much bad news/credibility issues associated with it over the years that it is probably a good idea. Perhaps a JV condition with whomever they may be negotiating with? I wouldn't underestimate Lanza's clout either.
Advanced Cell Technology Annual Meeting Announcement: A Harbinger Of...?
Sep. 12, 2014 7:35 AM ET | About: Advanced Cell Technology, Inc. (ACTC)
Disclosure: The author is long ACTCD. (More...)
Advanced Cell Technology has scheduled its Annual Meeting.
The company intends to change its name to Ocata Therapeutics.
The proposed increase in authorized shares is a harbinger of things to come.
Advanced Cell Technology (OTCQB:ACTC) has scheduled its annual meeting for 9AM on Nov. 12th. The most interesting points on the agenda are a name change for the company to Ocata Therapeutics, and a proposal to increase the number of authorized shares of the Company's common stock by 22,500,000 to a total of 60,000,000 shares. The name change is an understandable move to distance the company from its checkered past, and it makes sense to do this before up-listing. By contrast, the increase in share count has caused something of an uproar, as it flies in the faces of previous comments from management.
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Dilution comes in several different forms, some worse than others. On each of the two occasions that Tesla (NASDAQ:TSLA) issued convertible bonds, the terms were so good that it was actually a positive for the stock, despite dilution. Advanced Cell doesn't have anywhere near that kind of credit or credibility, but the point is that the impact of dilution depends on the terms of the transaction. In the most recent case for Tesla, stock would only go on the market well above any price that TSLA shares have ever seen. In this case, I speculate that the bulk of new shares would be used in a private placement with an established pharmaceutical firm in order to form a joint venture. This is step 5 of the process I outlined for the company, which is now halfway complete. While the same thing could have been accomplished with a revenue sharing contract, which technically would have been non-dilutive, the practical effect would have been the same, and this approach is likely far more palatable to prospective partners. The new shares represent 40% dilution for existing shareholders, and if all of them were used for a JV at the current stock price of $9, we'd have the following inputs for my Phase II valuation formula (updated here to account for the reverse split and proposed increase in shares):
TAM / 5 / shares outstanding = ACTC price
$5b 60M $83.33
It's important to remember that this is just an example of the valuation formula I have already suggested, not an actual valuation calculation; any of the inputs could change. Most notably the price at which shares are placed with a partner, could easily be higher or lower than the current stock price. Outside factors, such as the recent patent grant, will certainly have an impact on ACTC share price as well.
ACTC shares involve plenty of risk, which includes, but is not limited to, misinformation about the company such as the existence of preferred shares. The proxy and prior filings indicate that the company is authorized to issue 50M such shares, but they do not currently exist. Another risk is the possibility that common shareholders will vote this proposal down. The proxy clearly shows that they have the ability to do so, since "Directors and Executive Officers" own just over 3% of current shares as of September 1, 2014. Gary Aronson owns a little under 8% as of the same date, due to previously discussed warrant settlements. The fact that Mr. Aronson has not dumped all his shares could be taken as a positive on its own, and my take is that if you were willing to accept the risk inherent in ACTC before, there is no particular reason to change your mind now. Such investors should remain focused on my seven steps, particularly publication of interim results in a top-tier journal, and then terms of new financing. In my opinion, these events should occur in the order listed and management has no control over the timing of publication. To trade in and out of ACTC shares based on events like this would be to miss the forest for the trees by taking a misstep on the path to potentially larger gains.
JShitty....so if this is your analysis, why are you in the stock? Are you a short-pumper? Why are you even here? Is that you Gary? Clown.