Confusion makes Opportunity for those with Clearity
CLPA and TSNG rushing to vote shareholder approval
for a merger deal, will make an eventual CLPA IPO
more appealing to underwriters who will be creating
shares that represent the value of Both Companies.
Now, on Wednesday there Will be a stock symbol CLPA
and TSNG will be invalid. the new symbol will then
represent the value of the 8 million or so shares of
Cell Pathways which have an approximate book value
of under $2, considering their current cash position.
Then you take the 1/3rd of TSNG today, and you get
another $2, giving you a CLPA stock quoting at $4.00.
Keep in mind that TSNG's current book value is about
$1.50, which gives only .50 cash per CLPA share. If
you look at it that way, then CLPA may open under
$2.00 per share Wednesday, giving current TSNG holders
a raw deal. If this were the case, then I doubt that
shareholders will vote tomorrow to approve the merger
unless their confidence in the FDA Trails is in Doubt.
The IPO of CLPA would have added 2.5 mil shares at
a $12 price, but the underwriters could'nt get that,
and with Cell Pathways getting venture capital, they
did'nt need it that urgently, even with the projected
TSNG merger.
Bottom line is whenever you see such a convoluted
deal, it usually means lower shareholder value in
the short run, at least until Wall Street can peg
some real value or expected value out of these two
companies. So the short term potential seems much
more on the downside for whatever TSNG labs becomes
by trading Wednesday morning. Good Luck.
P.S. I shorted 1,000 at $6.00. I wonder how I'm
gonna "cover" it since TSNG may not be trading if
the merger gets approved. I guess the FTC will
figure something out... |
