The more stock naked shorted, the more they need to churn it to hide those shares from becoming fails to deliver.
Rock Creek Pharmaceuticals Announces Japanese, European and U.S. Patent Developments and Valuation Initiative for Lead Compound
Dr. Mullan also addressed the recent volatility in the Company's common stock, "The market pricing of the Company's stock likely reflects significant concerns that the Company will be able to continue to finance its development activities and operations. In that regard, based on peer-reviewed scientific publications and regulatory agency controlled clinical data, coupled with an expanding intellectual property portfolio, we are exploring a variety of capital options that we believe are potentially available to us. Therefore, as an adjunct to the ongoing mutual commitment between the Company and the investors in the convertible note, we are evaluating various strategic alternatives, which will ultimately rely on the value of our intellectual property."
My hope is Dr Mullan is able to locate alternative financing but regardless what financing is ultimately agreed to, my guess is Maxim and their allies will likely reverse position because the upside potential will have shifted greatly.
If a new agreement with the note holders is reached (or even not reached), my guess is the note holders will no longer see a grinding of the stock price lower and lower as beneficial.
Two and a half weeks ago, at the 2016 BIO International Convention, Dr Mullan said the monthly disbursements associated with the convertible notes were being renegotiated. At that time, I speculated that either new note terms would be agreed upon, or Dr Mullan would locate alternative financing which would effectively replace the working capital that the convertible note was intended to supply.
Given the stock price action since then, it appears that an agreement with the convertible note holders has not been reached yet, but in the mean time Maxim and their trading allies continue to grind the stock price lower and lower.
I doubt the convertible note holders see a problem with the stock price declining while they are in the process of negotiating new disbursement terms with Rock Creek. No doubt the note holders are seeking even more favorable terms which will allow a higher percentage ownership of the company.
Which leaves the possibility of alternative financing. Unfortunately, not much has been discussed about this but Dr. Mullan did make the following statement back on May 5th, in this press release.
….to be continued…
My understanding is the Maxim 1 year contract was related to Lead Managing Underwriter, book runner, and other things. It does not mean Maxim will stop being involved in trading. The contact expiration means RCPI would be free to seek other investment bank and financing options.
Clearly, some quantity of shares are being converted due to the defective terms of the convertible note but WHO helped to create those defective terms? Maxim was the "managing underwriter" weren't they? Was Maxim involved in the creation of those terms? Was Maxim acting in good faith trying to help their client Rock Creek raise capital? Does Maxim benefit from the large trading volume that has been created due to these defective terms? I don't know the answer to these questions, but do you since you are maintaining "it isn't Maxim's fault"?
And how many shares has Maxim been instructed by the company to sell and when were those instructions given?
Does that align at all with the number of shares being traded?
Does it align with 50M, 40M, 30M share trade days?
Does it align with the actual shares outstanding?
I don't know the answers, but I think you don't know either, do you?
After listening to the presentation yesterday, it has become clear that the dilution being created by the convertible note is a significant problem and cannot sustain itself as is.
The current stock price is obviously being driven by expectations of future dilution driven by the existing terms of the convertible note, rather than scientific prospects.
Yesterday, Dr. Mullan said that the monthly disbursements are being negotiated (or something to that effect), implying to me that monthly disbursements from the convertible note may have stopped until a new note agreement is reached.
Given that Dr Mullan is currently in California this week meeting with potential new investors, I think there are couple possible outcomes.
1) New note terms are negotiated that significantly reduces the dilution effect going forward.
2) Dr Mullan finds new alternative financing that effectively replaces the working capital that the convertible note was intended to supply.
Hopefully, if either option 1 or option 2 comes to fruition, Maxim will no longer be the sole placement agent after their 1 year contract expires.
So genius, you say they issued these shares.
How many shares would that be?
What is the actual legitimate number of shares outstanding?
The naked short selling in this stock is beyond belief.
It is so obvious that a massive amount of counterfeited shares are being passed back and forth every day, constantly putting downward pressure on the stock, between a few unscrupulous Market Makers (and perhaps others in the background).
For the past several days, there is all kinds of FUD and speculation about what the actual (legitimate) number of outstanding shares is.
Whatever it is, when you add in the illegitimate naked short shares, the volume is very large as evidenced by the number of shares being passed back and forth the past several days.
If the CEO can manage to find alternative capital, as discussed in the May 5th Press release (“we are exploring a variety of capital options that we believe are potentially available to us”), then the unscrupulous Market Makers passing all of those illegitimate counterfeit shares back and forth may find themselves in a very uncomfortable position.
It will be interesting to see if any new capital raise news comes out the upcoming conferences next week.
What does that have to do with Maxims contract set to expire?
It's right there in the 10K if you want to go read it.
As many have noted, Maxim is constantly selling for the past few weeks.
I think the expiration of their contract will be a significant event.
My take is that Maxim (and others behind them) is trying to pressure Rock Creek into doing something.
It’s nice to see that the class action lawsuits stemming from Jonnie’s leadership has finally settled. Don’t know if that risk was impacting investment decisions, but I am glad that ugly episode is behind the company.