"Raising $5mm to keep the company going was expected but I suspect the rich deal to PP participants may be related to pressure being exerted by the dissident group. This is just speculation, because we we never know who is taking the PP, it can be Paradigm who will cover shorts or distribute over time. Assuming insiders have taken the PP, insiders can grab a quick and cheap (potential) 22% ownership (on top of whatever shares controled or friendly to current management) to be used in any proxy fight."
A couple of observations, Cal.
"I suspect the rich deal to PP participants may be related to pressure being exerted by the dissident group."
Perhaps, but what about the first Paradigm deal? There was no MMC then, and the premium was hellacious. We've had 4 years of highly questionable financing, in which shareholders have been repeatedly fleeced because management could not get cost-effective financing. I don't dispute that in this case we may be paying an extra "RK Discount" - but the fact that we're in this predicament at all can be laid squarely at the feet of Rebecca Keeler. Conduct that has alienated The Street means that Dimethaid has had no conventional financing for years. In effect, Dimethaid has been blacklisted because of existing management, and the MMC is not to blame for that.
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"Assuming insiders have taken the PP, insiders can grab a quick and cheap (potential) 22% ownership (on top of whatever shares controled or friendly to current management) to be used in any proxy fight."
So can the MMC.
stockhouse.ca
Your point is well-taken, but let's remember: this is a company that's gone from 40% institiutional ownership to almost zero. Existing management holds a negligible amount of shares (in Canada, anyway). Neither they, nor the investing world has demonstrated any faith in the company, so why would they start now? Especially (as you point out) if they fear the advent of the MMC.
Mind you, insiders might finally be buying into a winner, if the MMC is successful. Now there's an incentive ; )
Regards,
Jim |
