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Biotech / Medical : IMAT - ultrafast tomography for coronary artery disease
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To: WHL who wrote (2456)5/9/1998 11:21:00 AM
From: Bruce Rozenblit  Read Replies (1) of 3725
 
We are in for it now. One of the ways small companies raise capitol is that they make "private placements" of stock. That is they sell stock to buyers at a discount to the current average price. This stock is NOT publicly traded. Then the buyers agree to hold the stock for a certain amount of time. The length of time is whatever the agreement stipulates. When the time expires, the buyers can dump the stock on the market, usually for a considerable profit.

What is going to happen is that every time the stock tries to rally, these guys will dump and the rally will be snuffed out until the stock is used up. With 16 million shares, that is a lot snuffing.

Imatron needs capitol, and if they can't get it from sales, they probably will issue more stock, either with private placements or IPO's. With the IPO, we get hammered right away, with the private placement, there is a delay, but we still get hammered eventually.
With this much dilution, we might not see $4 till next year.
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