That financing looks very dilutive.
I am short WAVO, so ignore me if you don't like an alternate opinion.
From the S-3A:
_____________________________________________________
WAVEPHORE, INC.
1,129,116 Common Shares
We have issued and sold, in a private placement transaction, 879,116
shares of our common stock, as well as a warrant to purchase an additional 250,000 shares of our common stock to Castle Creek Technology Partners LLC.
Under this prospectus, Castle Creek may sell some or all of the common stock, including the shares it may receive by exercising the warrant, to new purchasers. Castle Creek may sell the common stock through ordinary brokerage transactions, directly to market makers of our shares, or through any of the other means described in the section entitled "Plan of Distribution" beginning
on page 12.
Castle Creek will receive all of the proceeds from the sale of the common stock, less any brokerage or other expenses of sale incurred by them. We will receive up to $2,665,000 if Castle Creek fully exercises the warrant. We are paying for the costs of registering the common stock and the shares underlying the warrant covered by this prospectus.
_______________________________________
Notice it says they received up to $2,665,000. Lets leave out the warrants (which I can't find a strike price for) and just look at the stock. $2,665,000/879,116 = $3.03 per share. OUCH!!!! That is a serious discount. And all the shares are registered, so they can be sold right now. Looks like instant profit to me. It also gives WAVO the right to force another investment, and while it gives terms for the warrant that is a premium to the market, it does not give terms of the stock.
I think we are seeing a pop for two possible reasons:
1. Whatever broker is going to dump these shares (or sell them short) is hyping it to get a better price.
2. Daytraders got confused by the price used for calculating the SEC fee ($8.65) and thinks WAVO sold shares at a premium, not a discount.
I intend to short more.
Just my personal opinion and analysis,
Archer |
