Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: DaveAu who wrote (21095)	9/1/2006 10:12:59 AM
From: rkrw	Read Replies (1) \| Respond to of 52153

Is the shorting any worse than it is for companies that are down to a few quarters cash and everyone knows they are or will be making the rounds pitching an offering? If you look at the terms of these deals, they're pretty tight, small discount and not much notice given, so I'm not sure the shorting will be too bad for them. But it'll be interesting to look back at the price action just before and after the shares are sold and see. Nice to have the funding vehicle as an insurance policy. Bios that don't prepare for rainy days are the ones making the mistake imo. Even if it means going to an Azimuth.

To: DaveAu who wrote (21095)	9/1/2006 10:20:30 AM
From: Biomaven	Read Replies (1) \| Respond to of 52153

Doing these kind of deals is a sign of either naivete or desperation. Not really if it's a straight equity deal (no funny death-spiral converts or massive warrant giveaways). The trouble is that the alternative (a follow-on public offering) is slow and expensive - my wild guess is a public offering (assuming no shelf) costs greater than $0.5m in fees (extrapolating from when I last did one of these as a lawyer 20 years ago <g>). Plus a several hundred man-hours of the company's time. Sure these shares are going to find their way back to the market at some point. But the same of course is true of public offerings. Shorting just shortens the time before they are on the market - doesn't really impact the ultimate effect on the price. Peter