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Biotech / Medical : CYPB - Cypress BioScience
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To: Jay Lowe who wrote (267)6/2/1998 8:04:00 PM
From: muddphudd  Read Replies (3) of 586
 
Jay,

I spoke with a friend in London today. he got the following from someone following CYPB. Does this 'worry us'?:

"this company is in the process of a "private placement" liquidation,
which means an off-shore account (like us) gives the company money and
the fund gets private shares, which the public does not see. After a
restricted time period, the fund is allowed to sell shares and dilutes
the company tremendously.

for example,
a company has 10 shares outstanding, but issues 5 shares to an offshore
account
when the fund sells the shares, it increases the share count to 15,
diluting the shares tremendously.

there is tremendous "overhang" in this stock, with probably a million
shares left to sell. Unless something tremendous happens to the
fundamentals (i.e. FDA approval of a drug), this stock will have trouble
moving up."

Regards.
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