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Biotech / Medical : Nortran Pharmaceutical -NRT.V -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Forthright who wrote (662)	5/11/1998 11:08:00 PM
From: Saracen	Read Replies (2) \| Respond to of 1185

Au contraire - I have simply been busy with other things. I have, however, continued to watch Nortran with much interest, and a certain amount of disappointment. I have been pounding my head against the wall over the sell-off, and have come up with the following: I heard the Hoffman LaRoche rumor the same day that the financing at $2.05 was announced. If management knew that they were about to announce such a big deal, why did they not wait to issue stock AFTER the news, and lessen the dilution? Reason: so the insiders (or strategically placed friends) could load up on some cheaper paper before the news, and put more money in the company in the process. In fact, one of the other rumors I heard was that Dr. Walker was going to be a major participant in the new financing (by selling his stock?). Now, once the news came out, I understand that most of the major selling was coming in large blocks, which would indicate either insiders or institutions. Either way, they probably knew that the news was coming and were fully prepared to sell into it in order to participate in the financing. Furthermore, if I am not mistaken, the V.S.E. would have still been required to approve the pricing of the deal, and if the price had gone up too much after the news, V.S.E. approval would not have been forthcoming. So, in conclusion, I guess that you could say that I have put together a "conspiracy theory": the insiders and the institutional shareholders knew that the major news was coming, so they arranged a private placement financing which would allow them to sell into the run-up from the news, and get their stock back (plus a warrant) at a lower price, while putting fresh capital into the company. Furthermore, they knew that they still needed V.S.E. approval for the pricing of the deal, and so they aggressively sold after the news came out in order to keep the price low enough to get V.S.E. approval (and to raise the cash to buy the private placement units). This is just a theory. I welcome any and all comments.