"...................With about 3mill on hand and the prospect of further MND funding PAA's finances should be ok in near future ..................."
At the time of reporting we are told the piggy bank has enough in it for 3.19 quarters (2 quarters being a min requirement). Agree there is likely more MND funding to come but there are also more expenses. My point being with the market doing its rubbery legs thing and a significant degree of uncertainty regards world wide economics on the short horizon I for 1 would be less concerned if the runway was a little longer.
"........... the next 12 months should be a rewarding time for shareholders, the options could come into play..................." Can I convince you to reword that DAAC to read - "the next 4-6 months will be rewarding and it will be great to see the options come in to play"
My latest, greatest concern is the example provided over at RAP. For those not watching the basic/ sweeping summary is not that dis-similar to a potential scenario for PAA. Small co run fiscally tight (RA happens to be the Chair). Interesting science that I would describe as a SAAS solution in the bio space - i.e. enabling users to cough into a mobile phone to remotely test for given respiratory conditions. Been up and down in price a couple of times ($0.30+ and briefly circa .50) more recently sitting around the $0.04 range. Recently announced a break through Covid test so a lot of optimism among SH's some who have come in above and others below the offer. Some reported earlier references to possibility of fair value up to $2.00 but lets discount that somewhat as typical blue sky dreaming. Pfizer has stepped in with a cash offer of $100 mil (SP $0.115) plus the offer to throw a few mil on the table to further the current testing. For whatever reason the BoD have recommended it be accepted so now there is a pretty solid movement to vote the offer down. The market value of RATS by the way is currently sitting at around $22 bil so a not insignificant market space. So distilling this all down to a simple scenario here is my concern. Initial offer gets up and everyone gets paid $0.115 cash and goes home to watch what Pfizer goes on to make out of the best sandwich at the picnic. OR the no vote wins the day and the question becomes how do the BoD and management walk their position back - to move the business ahead. How do they maintain credibility ? If as a result they walk or are rolled out the door how does the business move forward from the vacuum this would create ? Keep in mind this is but an example of a scenario that may or may not play out.
Suggest we are potentially at the very front end of a new economic cycle in which the next big bio product will be reality pills mainly marketed to wide eyed punters. The BP's are safe with lots of cash in the bank. Just like crocs they can sit quietly in the water and wait for dinner to come to them. Dinner being small developers of great product that do not have the funds to see them through the tough financial times. I happen to be in a couple of other bio's that have scooped up and are sitting on enough funds to see them continue developing their product well into the future. When they sit at the table they can negotiate from a position of relative strength. My concern is that PAA has not and does not appear to have this option open to them but have instead relied on the science to orchestrate a good deal for all shareholders ! What about the patents I hear you say and fair enough. Problem with patents is they are only as valuable as the funds you have available to defend them. In negotiating a deal they are pretty much just one of the items on a check list to be ticked off. Of themselves suggest while they help, they wont be the main reason a deal is done. I will be very happy to be proved wrong for such a scenario not to play out. Back over at RAP one can imagine at some point Pfizer tabling a revised offer, or for some white knight to gallop into the room however the base price has already been set. Lets say they double the offer to $200 mil ($0.23 PPS) - for a breakthrough product targeted to a $22bil market segment - who at PAA would be happy with a similar scenario - not right now but just after MPL being shown to be effective against Covid !
Of course at the moment the apoplectic scenario is for any one of the top 40 shareholders to decide to walk. PAA for some time has enjoyed very low liquidity, both a blessing and a curse in such a tightly held stock. Someone wanting to dispose of 1 mill + shares would likely put significant downward pressure on the price. It possibly would be the first time that in a scenario where a BP begins meaningful discussions they may, perhaps, potentially ......... encourage a disgruntled holder to roll over at a slightly lower than the current price. The best defense for any such outcome is to increase both liquidity and price. Some I am lead to believe have tried this by price manipulation (false trading) but that is against the rules and frankly not likely to sustain an upward trend.
The only real answer is to convince the market that the stock is worth buying - and at a higher price than today - not just by actions but also by words !! For PAA there is an excellent story to be told. It is time to tell it and tell it well !
PAA Price at posting:
9.2¢ Sentiment: Hold Disclosure: Held
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