I agree with you completely, which is a reason I so strongly opposed the R/S. At this point they've probably done better than 90% of the R/S's I've seen as the stock's up slightly over where it was prior to the R/S. Many long term holders sold out and announced their intentions to buy back, some thinking they could do it as low as $2. I'm uncertain if some have paid the higher price to get back in, or are watching and waiting, still hoping there will be weakness.
I believe management has news coming, news which convinced some shareholders to change their votes, but I have no idea how soon some real news will be heard.
The only thing I heard from an investor who spoke with the company was the obvious reference to Institutions buying into stocks when they're $5 and more. It's true, but many Institutions want larger market caps, and that doesn't change at all with the R/S.
I can only think of one thing the R/S would permit which wasn't possible before, a partnership which included say a 30% buy in.
With 150 million shares either outstanding or committed to options or warrants GNVC had 25% of their authorized share available, and no company likes to push it right to the limit.
30 million shares is still tiny, but GNVC could potentially partner with someone taking say a 10 million share interest, and they'd still have 5 million shares available. I'm not suggesting this is happening, just that the possibility is there which wasn't before the vote.
While I'm certain at some point in the future GNVC will want the A/S increased to 100M or more. If they do their job, raise the share price dramatically, I'd want at least a 2 for 1 split to permit such an increase. In fact, if left up to me, any increase would be accompanied with a split until at least the majority of the ten shares are returned. Three 2 to 1 splits would get shareholders 8 for the 10 they surrendered, I could live with that, at least for awhile.
Ultimately it's still about Market Cap. At this point, even if all 30 million shares are outstanding, we'd need a share price over $33 to reach a billion dollar market cap, that may sound large right now, but few companies with approved drugs that are even close to blockbusters don't have billion dollar market caps. Both Novartis's drug and TNFerade certainly have blockbuster potential, probably many times over. Of course with the current O/S the price would need to be over $70 to achieve that level. While both numbers sound good, back before the R/S many felt we'd go well into double digits prior to approval, I don't believe the same can be said about reaching triple digit's today. Sadly our dreams are being diminished.
Gary |
