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Biotech / Medical : Texas Biotech (TXB)
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To: Bill Tomko who wrote (136)3/19/1997 10:47:00 PM
From: Meridian   of 834
 
I agree, dilution is not a problem. What's another 1 million shares when we're talking about what could be a successful biotechnology company. I'm more concerned with the timing of the private placement. Results from the phase III trial are due within the next 2-3 weeks (certainly they won't run out of money by then). My point is that if TXB management was real confident that the results would be positive they would opt instead to wait until after the results were released to tap the market place, thus taking advantage of the higher stock price and giving away less of the company (that's just smart business). Or maybe they think the stock will be lower, and they are trying to raise some money before it drops another 25% (which is also smart business).

Key to this line of reasoning is the assumption that TXB management is smart, which I believe them to be. And if that's the case then the latter scenario is the one that makes sense. I hope that I'm making too big of a deal out of this, but it is a little peculiar.
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