I believe that his (relatively) large buys in the aftermath of the "debacle" last month was, as rms put it, a "subtle", (or not so subtle) indication (and an intended signal on his part to longs) that... "all is well"... (so-to-speak)... despite the crash in price. He had previously been buying in laughably small amounts (for a ceo). It is either that, or 1) He is a clueless ceo that is deluding himself about his own company's prospects, 2) He knows that his company doesn't have a chance, and is intentionally deluding shareholders with the charade of "buying my own company". Given his background, and those around him, I doubt that either #1 or #2 would be the case.
sabaidii2, I agree with most of your points in your posts. There are some longs here that have in fact been here for a "long" time, and, I imagine, based on the fact that they are still here, at this price, will not soon be "long" gone. I am one of them, and I can name a few others. Some may be "neurotic", some may be "goofy", some may be "stupid", some may be "ill-informed", some may be "clueless", some may be "idiots", some may be "damned smart", some may be "well informed", some may be "know-it-alls", etc., etc..... we all have an opinion of each other, don't we.
Well, my point is that it is not necessarily "human" sellers that are relinquishing their shares. And "market makers" are not in the game here. Anyone out there really know what a "market maker" function is, given the nature of our electronic markets and the technology involved, these days? If there is any "manipulation" occurring here, it is not "market makers", it is high-frequency-traders (HFT). Where are the buyers? I don't have a clue... appears we are here before the "buying" crowd, and as such, will have to endure the pain of that fact. The reason I stay here is because I believe the "buying" crowd will arrive (eventually) in large enough numbers to allow me to forget about the pain that I am currently enduring. Give me some time to put together some numbers that will explain my position.
golong, you make a very good point! As I posted in a response to hanna, below, this thing is certainly testing my conviction in my investment here. I hope that I will be around for a payoff, but, I cannot foretell the future. I have invested a good chunk, and I have also said goodbye to it. I will be damned #$%$, but it will not kill me if my entire investment here disappears.
hanna I share your frustration and perplexity as I'm sure all the rest of the longs do here as well. This is certainly testing my conviction in my investment here. My personal opinion is that this thing, in the absence of a real "human" interest in buying into the science and the company, is, as I have stated previously, being "algorithmically manhandled". This would involve a discussion about the larger issue of the nature of our markets today. On top of that, and perhaps related to that, is the fact that there is a very adroit short player here. I have put together some data that has led me to this belief, but not enough to prove it (to myself as well as anyone else). It would take a quite larger sampling and comparison with some other rnai / biotech issues and involves some pretty tedious data gathering. I have alluded to these issues recently and didn't really get a response, so I assumed that the board didn't really care. Perhaps I will do it anyway and post what I might find, but it will take some time.
rms, I really don't think the preferred (Tang) have been selling. RTW recently reported a "zero" position, but that was beneficially owned common. We won't really know (or be able to infer) if he converted and sold his preferred stake until the next quarterly report. The preferred knows that selling large quantities of common in the open market will only serve to drive prices down (although we have in fact seen selling that is driving the price down, I don't attribute it to the preferred). The only way they can personally move the price themselves would be to be buyers in the tradable float, and they are constrained by the 10% ownership limitation.
I agree with you that it would be in their interest to not have the company that they are heavily invested in run out of cash. I don't believe they will let that happen and will take whatever measures are necessary. In regards to Tang, and his "confidence" in the company that I alluded to in my response to hanna the other day, bear in mind that he basically voluntarily gave up his rights (in a very specific scenario) to half of is preferred position when he allowed half his series A shares to be converted to series A-1 shares. That conversion allowed RXI to classify that monetary position as "permanent shareholder equity", and that is what allowed them to list on NASD. So Tang has demonstrated that he has a deeply vested interest in the success of RXI.
they will be buying shares that are not a part of the tradable "float", but will become a part of the float immediately after purchased.
bio, the shares will be purchased "off the shelf". They aren't really "open market purchases". And while they will be bought at "current market price", it will only be as long as that price is at least $4 or above, per the agreed upon "floor price", as stated in the purchase agreement between LPC and RXI.
welcome back zam!!... and just for the record, in the words of the immortal Nathan R. Jessup, "YOU CAN'T HANDLE THE TRUTH!!!..."
"Shorting". Yes, I have wondered the same thing myself. Especially given what I found regarding the other investments that they've made (as I posted in a thread yesterday). Yes, the agreement explicitly states that they are prohibited from "engaging in short transactions", but that by no means, means that they are not doing just exactly that. The market is just too big and with the SEC that we have, how would anyone ever be able to determine that that's what they are in fact doing. I want to be very clear that I am not accusing them of this, but after looking at the price charts of the other investments that they've made, I have begun to wonder. I admit that I don't know nearly enough about them to determine what might be going on with regard to their investment in RXII. I've only formed an opinion about a "possibility" based on public pr's from other companies that they've purchased shares in, and looking at price charts for those companies subsequent to those purchases. The record is not good. It will be interesting to see if, and how quickly, they pony up the $1M share purchase after RXI files the opthomology IND. If I have time over the weekend I will try to find out more about whether they've ever made any additional purchases in the companies that they originally invested in. I have a list if anyone is interested.
Well I agree with your point here, hanna. I've posted in the past that I would rather see a debt issue rather than dilution. On the other hand, and after some more thought, I don't necessarily see further dilution necessarily as a bad thing. If, as hedge points out, it adds to liquidity that allows for larger funds to buy in, then I'm ok with that. The company changed the "authorized" share count down to 100M. Even if they were to fully dilute to that amount, a $5B market cap makes for a $50 price. I think you make a good point though about a loan and a balloon payment payed for with newly issued shares at a higher price.
8K filed 4/23/14. Section 2, paragraph (e): "Purchase Price Floor":
"The Company and the Investor shall not effect any Regular Purchase under this Agreement on any Purchase Date that the Closing Sale Price is less than the Floor Price. “ Floor Price ” means $4.00, which shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction. "
hanna, I don't think your scenario is inplausible. I think it is unlikely. I don't think Tang is confident enough yet in the company producing a cash flow that would allow repayment on his debt issue. He could also just have RXI issue new common shares to him. Again, that might require more confidence on his part than he might have at the moment. I think the more likely scenario, if it is ever necessary for it to come down to that, would be a purchase of additional shares of preferred stock. Yes, they will need more cash at some point. We are not in an "emergency scenario" at this point. But if RXI is not able to access the LPC line above $4 within the next 12mos (cash on hand), then we are in trouble.
rms, I guarantee you that the price must be above $4 in order for RXII to require LPC to make another purchase. It is one of the sec filings related to the agreement. It is known as "the floor price". I cannot look for it now, but I will find it when I have a chance.
also makes me wonder if LPC doesn't have an incentive to try and keep the price under $4 for the next two years. I hope that I am wrong about this. If anyone out there can provide anymore info or input on this that would be great. I would love to hear it.
Yes, smokey, it does have to be over $4. I hope that they will be able to access it over the next 24 months before the agreement ceases. Otherwise they will run into a cash crunch this time next year. A while back I wanted to know more about LPC. Hard to find info on them. Most google searches returned similar investment pr's as the one RXII put out. I will tell you this. Based on what I found, these guys don't appear to have a very good track record of picking winning stocks. Makes me a little worried. I found about 20 or so investments they made over the past 4 or 5 years or so just like RXII and I don't think I found a single one that is currently trading above the price where they agreed to invest. If anyone's interested, just google Lincoln Park Capital and look at the price charts of the companies they areed to invest in relative to when and where they agreed to be a buyer. Appears to me that they've agreed to purchase tens, if not hundreds of millions of dollars worth of stock while at the same time losing just as much (if they are holders of their original purchase without selling right away). Makes me wonder why Geert needed funding from such a company if he supposedly had firms knocking at his door to provide money.