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Biotech / Medical : VD's Model Portfolio & Discussion Thread
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To: Biomaven who wrote (4484)3/29/1998 5:19:00 PM
From: Andrew H  Read Replies (1) of 9719
 
I saw the floorless convertible by GZTC. I have no idea why they did this. It is usually done by companies who are desperately in need of financing and can find no other prospects. I don't think this is the case with GZTC. Perhaps V1 has sme insights here.

As you say, such convertible offerings are often used as a method to short the stock and bring it to much lower prices where the conversion takes place. I have seen a number of stocks devastated by such convertibles.

I will have to check the details in the SEC filing, but on the surface I find this offering quite troubling and would not be surprised to see lower prices once the 9 month period has passed. Of course significant progress by the company could push demand high enough to negate this potential problem.

The company remains, IMHO, one of the brightest stars on the developmental biotech horizon.
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