Well, Fish, I'm expecting the net tangible assets to come close to $4M, which is the threshold for NASDAQ to send them a delisting letter. The only trouble with this is that the co. isn't required to announce this material event when it occurs. Most co.'s that get the letter don't.
After PMWI gets the letter, they will have to remedy the NTA situation. The only way to do that quickly is to sell some common or preferred stock. Typically this is done in a private placement, since companies that find themselves in this situation usually have a low stock price and can't do a secondary. In PMWI's case, however, Morgan Stanley owns a huge chunk of the stock and I assume they can either arrange a secondary or a private placement. Shorts can only hope that the stock is sold in a fashion that will put pressure on the stock price. A secondary would have some immediate effect, but a Reg. S. private placement of convertible preferred might have a more severe effect, although not until the convertible buyers convert and sell, which might take quite a few months. |
