Biotech Valuation Message Board

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Biotech / Medical : Biotech Valuation

CRSP 54.55

-3.6%

3:27 PM EST

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To: DaveAu who wrote (21095)	9/1/2006 10:20:30 AM
From: Biomaven	Read Replies (1) of 52153

Doing these kind of deals is a sign of either naivete or desperation. Not really if it's a straight equity deal (no funny death-spiral converts or massive warrant giveaways). The trouble is that the alternative (a follow-on public offering) is slow and expensive - my wild guess is a public offering (assuming no shelf) costs greater than $0.5m in fees (extrapolating from when I last did one of these as a lawyer 20 years ago <g>). Plus a several hundred man-hours of the company's time. Sure these shares are going to find their way back to the market at some point. But the same of course is true of public offerings. Shorting just shortens the time before they are on the market - doesn't really impact the ultimate effect on the price. Peter

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