This could be a ploy to raise some cash. Actually, it may not be so bad.
Think about it. If IPJ simply tried to float an additional 3M shares of stock, it would possibly depress the current stock price a lot. IPJ is actually selling shares at $3/share. If you figure $2.50*2 for two special warrants, plus $4 for the additional share which can be purchased with those special warrants, you get $9 for 3 shares.
This is not such a great deal, if you feel that IPJ is on the verge of a major breakout. If you feel that IPJ will go above $4, it would be in your interest to purchase 3 shares on the market for less than $9, at present prices.
One way of looking at it is as follows: The only way the purchaser gains, compared to a regular shareholder, is if the price stays below $4.
I don't know why IPJ may need cash at this time. Maybe they want to keep their cash reserves up, just in caese. Generally, though, it's always easier to raise cash when you DON'T have to raise cash. In my personal situation, I'm always offered loans from banks when I don't need a loan :).
To summarize, IPJ sold 3M shares at a slight (approx. 14%)discount, without flooding the market. Of course, I'm assuming that this was basically a private placement. |
