You keep talking about being able to buy the stock at a discount to the deal which completely ignores the warrants. As I laid out before in one of my many posts that were mysteriously deleted, the true price of the deal was closer to $2.00, so at $2.70, it's a 35% premium to the deal. Not trying to stir the pot here, just trying to be clear on the basic facts of the deal.
I think he is referring to the value of the warrant as being $2, so $1 to the investors at 50% coverage. Subtract that from the ~$3 offering price and you get an effective average price of ~$2. If you black scholes the warrant you get about $2 for it.
Yeah, there is some conspiracy going on here. Anyway, my point on Perceptive was that I would buy back if they were still long as of June 30th. If they stayed long through this raise or got bigger that would be a nice endorsement even though a 500k position for them is a rounding error given they are around $1B fund.
Here's the thing then, if they aren't going to phase 3 alone, why raise the money? I haven't heard a good answer to that question yet. They had enough cash for a couple years at current burn so a partner would have funded the phase 3. The thought that they needed more cash in the bank to get leverage in a partnership discussion doesn't hold water in my view. They would have gotten leverage from the fact that there were multiple interested parties for a partnership bidding against each other on deal terms. The most logical explanation is that they couldn't find a partner. Now big pharma is not always right. Or they could be waiting for an interim read on phase 3 before committing. I'm sure MRK wishes they waited until then with ECYT. But my thesis was that they would partner this thing sometime this year after presenting at a conference. This raise calls that into serious question so I took my loss. If some new information comes to light, I will certainly revisit, but this raise stinks to the high heavens and the stock is going to be dead money at best for a while IMO. And yes, that 0 for 36 refers to the Feurstein/Ratain rule. Given that companies with greater than $300M market cap have success rates in excess of 50%, there is definitely something to that theory.
Your float calculation is way off. fully diluted ignores this round of warrants too. cash buys you a phase 3 trial so better hope that turns out well. Will be the first sub $300m stock to have positive phase 3 oncology results. 0 for 36 since year 2000.
You doubt anyone sold yet the stock is down 10% on big volume. Hmm. I sold today, but I was only 60k of that. the rest were either other longs who see this raise for the massively negative event that it is or people that actually participated in the raise selling some of their stock to just hold the warrants for a super cheap price.
More likely it is because you are FOS and don't actually make intelligent points like I did that would actually rattle people's conviction. You are the proverbial blind squirrel that found a nut.
I tried that. My post explaining how to value the warrants is gone and the subsequent one as well. Maybe HC Wainwright got everyone in their firm to report it as abusive, lol
Sorry, they would own the warrants at 50c, not 25c. Still a fraction of their true value.
I just explained to you how it is textbook death spiral financing so not sure why didn't get thru your head. Also, what the hell are you talking about regarding PE and dilution? You just exposed yourself as being completely ignorant. Whatever someone was willing to pay for this company at some point down the line, it is now less to existing shareholders due to this financing. The dilution is absolutely material and has nothing to do with whether the company is being valued on a PE basis.
Here is a pop quiz for you, why does a company that has people lining up to buy or partner with them sell shares at a depressed price and also throw in 50% warrant coverage struck below the current market price? It ain't because there is a lot of demand out there. It's massively dilutive. Yes, if the stock is above $2.90 and investors in today's financing decide to exercise then they get cash. That is such an obvious point that it boggles the mind that you thought it needed to be pointed out like you are some expert. You can also throw Wainwright's $7.50 target out the window as that was just done to get this piece of business. Who knows what the analyst actually thinks it's worth. You can bet that the people that got the warrants are already shorting delta neutral against them now. That is the definition of death spiral financing - where your own investors are shorting your stock. Sometimes it's in the form of a convert with a coupon and sometimes in the form that OXGN used. Either way, it isn't a good thing and the market reaction today on already over 1mm shares volume is telling you as much. I lost 15% in this stock and moved on. Is there some chance it still could work out for them? Of course. But this is a major hit to the long thesis IMO, so I'm moving on as I said.
There is no way to spin this offering as a positive. Sorry. I wanted to believe that a $50M market cap stock had found a better way to treat ovarian cancer, but this offering says in no uncertain terms that there is zero interest in partnership from big pharma. They are going to go it alone and the likelihood of success is very low. This is a complete lottery ticket at this point. I doubt it goes below $2 before they ultimately announce their phase 3 results in a few years, but it's not going off to the races with 50% warrant coverage at $2.90. This is classic death spiral financing. I wish it would have been different here for the sake of everyone, but it's time to move on.
LOL. Appreciate the honesty. 12 monkeys in a room will eventually produce the complete works of William Shakespeare too. I will just let you do your thing in peace from now on.
Sentiment: Strong Buy
What is your response to the fact that your estimates for share count and cash (not to mention everything else you have ever said) were immediately proven wildly inaccurate and why should anyone listen to you?
Sentiment: Strong Buy
If OXGN is in talks with Roche then Roche's plans and OXGN's plans are one and the same, and thus he can't comment on either. As a general point, Langdecker strikes me as overly cautious in public settings. If you get him one on one he tends to be a bit more expansive.
Sentiment: Strong Buy
Market loves these results.
Sentiment: Strong Buy