Totally agree with you. There really is nothing new or surprising. It's pretty much a market deal.
Nobody likes new shares or conversions. But, it's the price you pay for being involved in a company that is developing a revenue stream. This is particularly true with vaccine companies, which have such a long tunnel before approvals. The light at the end of the tunnel is just about here now with Ecuador and, of course, the entire environment (political and economic) having changed since the bird flu panic. Our politicians, normally asleep at the wheel, are and will be throwing billions towards this type of company.
As you said, this is not a bad deal given the conversion is above market. There is a 90% alternative in the event the company chooses to payoff with stock, but that's not a bad deal compared to typical vulture type financing. It's not enough for the them to play the typical shorting games with the deal.
GNBT are masters of PR and they have a strong incentive for keeping this at a buck for a floor, with the trend upwards. If anything, they have the power to promote the share price to $2 level with real revenues coming in and progress in the bird flu, cancer and diabetes area enough to create a buzz that will flush the toilet bowl bashers that reside on Yahoo. |
