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Biotech / Medical : Visible Genetics Inc.(VGIN)
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To: Gulo who wrote (319)12/18/1999 1:48:00 PM
From: Biomaven  Read Replies (2) of 337
 
Gulo,

Note that these are the common that would result from the conversion of the convertibles that are being registered. Because of this, the timing of the registration statement is pretty irrelevant - nobody is going to convert and sell right now.

Of course they might elect to short the common if the rise continues (and thus hedge their convertible position), but they certainly don't have to wait for the registration statement to do this.

Your use of the term "dilution" is also loose here. Selling shares at market price does not cause dilution - it does increase the market cap, but it also increases the assets of the company. For the convertible like we have here, what does cause dilution is an increase in stock price, but that is the sort of dilution I am quite happy to live with. (The warrants are another matter - they came from a very poor deal done a while back, but we are stuck with them now).

Basically this stock has being going up because the consequences of the recent FDA action have finally sunk in, and of course because of the current genomics frenzy that gets applied to everything with "gene" in its name.

In my view the VGIN product will likely become the standard of care for HIV treatment. In the medium term I consequently think they should do well, although it isn't yet clear what their margins are going to look like. Selling the convertibles was an unfortunate necessity - basically you need to spend what it takes to get the product approved and launched.

I've been holding since July, when I bought at around $12 (as I mentioned at the time on this thread). I'm holding for now, although if the gene frenzy continues and we get further appreciation, I will likely lighten up.

Peter
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