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Biotech / Medical : World Heart Corp - WHRT and TSE/WHT
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To: the Chief who wrote (248)4/14/1999 2:52:00 PM
From: Dan Hamilton  Read Replies (1) of 500
 
I have mixed feelings about this one. I am disappointed because the company had indicated they would not seek additional financing until the share price was $25 U.S. (and hence less dilution). I had posed that question to Rod Bryden at the last AGM and certainly had the impression that no further dilution would be necessary until after the clinical trials had begun. You'll recall that last year at this time they did a private placement of 2 million shares at $5 U.S., right as the price spiked up into the $7 U.S. range. In retrospect, that seemed ill-timed.

On the other hand, I do understand the rationale of having sufficient cash to carry through any hiccups that may arise during clinical trials. For instance, if after commencement of trials in late 1999, a delay is announced in the timing of final approval of the device, the share price would no doubt be hammered in the short term. Not a good time to then have to seek further financing. So I guess it is a case of risk management - give up some potential upside to limit the downside.

I do have every confidence in the management team, and I am sure they have carefully considered every scenario. However, I think we can probe this issue further at the AGM.

As for Mike Cowpland, I think that's a simple case of him wanting some cash to finance his lifestyle. And he takes more heat when he sells Corel shares, so this is a safer option for him. I think we can expect him to be a steady seller of shares all the way through the process (subject to the restrictions).
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