Most of us holding here were holding over the biggest risk, the outcome of phase 2 trials, if they were negative we would have all lost our shirts. They were positive and we are rewarded but with only a day of good price action, which was promptly sold into, and now knowing this cap raise was on the cards its makes a lot of sense why we were sold into.
The thing that is frustrating , is that now the sophs get to come in, they dont have to hold over trial risking their shirts like holders, they take no risk of bad trial results, and they get a price that we were trading at before these results were even released. Does rub me the wrong way. And dare I ask how many of these sophs are cozy with the board?
And then there’s the valuation—a paltry $100 million. Many of us were conservatively estimating this company at $200–300 million, higher even given the recent results, puzzled at why the price was trading so low (its been answereed now). Yet we’ve given 40% of the company to the sophs for a mere $40 million. By any sensible measure, 40% should command $100 million— so the $40 mill is a deep discount that hands the sophs the upside with none of the attendant risk holders had to face. Curious to see an updated top 20 when all is said and done.
Resolutions from this board are rubber stamped, so they do what they want and we just watch. There are positives though and credit where it’s due: they stuck to their word—no capital raise before results—and if it is infact true that this raise was oversubscribed means we’ve got a well-funded company. At this point, all we can do is hope management deploys that $40 million wisely Im hoping some of it goes to courting big pharma with enough vision to value these assets appropriately for the next deal.
ATH Price at posting:
1.2¢ Sentiment: Buy Disclosure: Held
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