Re: Volume today exceeds the avg daily volume
The 6% current ownership if maximum dilution is correct as of now. My 3% was based on current ownership if maximum dilution prior to the first dilution, in other words as of the reverse split vote.
The actual effect of dilution is heavily dependent on stock price. Assuming good news from the trial results, the stock price should get a good bump, and dilution funding would be less impactful, all things being equal. But, it seems as if they would have a couple of months of cash after the trial results are released. If there is a deal to be had, it logically would be made in those couple of months. There won’t be major news expected other than those trial results, if they can’t get a deal after good trial results, there is no reason to think they’d get a deal next year that I can think of.
The overhang of potential dilution is a huge current negative for the stock price now. Why buy now, when your percentage ownership of the company might drop and drop significantly in the near future? Good trial news will bump the price, but good trial news plus the removal of the dilution threat would really move the price. Bad trial results would be game over.
That would also cause institutional investors to consider the stock. I’ve done some DCF valuations in my 30 years in the securities industry, one that took months. I couldn’t justify investing ‘current state’ without more risk that most institutions would stomach. (And management stating the split would bring in institutional investors was transparently ridiculous.) Institutional investment would be justified after both the uncertainty of trial results and dilution were removed. Good results without removing the dilution funding issue is more dicey. Getting institutions to buy in would be another positive for the price.
Those were my reasons for doubling my position at .51. I’ll see if it was brilliant or foolish in the next three months.