Hey guys, can we discuss the other turd for a moment, ie the CR?
Just looking at the available data to see how the rights issue is progressing. Whilst there was an initial round of buying of rights on market that appears to have almost completely dried up now. A total of around 29m rights were purchased on market (out of the 910m rights issued). I lean toward the assumption that if somebody purchased rights then they are likely to exercise them in the absence of the SP falling below 0.003, although there is also the possibility that a few thought they would take a punt hoping for good news from C14 before the CR closed. That CR window drops by 20% each day hereafter.
The total value of those rights to Biotron's CR if exercised in full is only $87k.
I don't know who purchased these rights but its worth noting that the on market trading of BIT heads has also dropped to near zero on a daily basis since the massive rush for the exits when the rights issue was announced. The stock is now almost completely ill-liquid as was the case during past CRs. Sadly after past CRs the price then dropped below the issue price for a good 6 to 12 months. Not sure that many here have confidence to look that far out this time around so we are in uncharted territory now.
The closing date for rights acceptances is only a week away. There are some people who know how many have paid up but most of us here are not amongst them.
I also note that many of the most vocal and bullish posters have completely disappeared from HC. General interest seems to have dropped off a cliff. Did they all sell out weeks ago when the SPP was announced and quietly disappear into the night? This has the feeling of complete capitulation.
I know that the board did say that they "intended" to participate to some extent but if nobody else did then Mahe picks up 250m shares which when added to the current issued capital is 21.5%. I find this an interesting possibility since an underwriter is generally exempt from the 20% cap within the takeovers act for obvious reasons. Who is Mahe going to unload all of these shares onto? At the current turnover of BIT stock on market it would take 112 years to sell that many (yes, that might be a slight exaggeration) !
The big question in my mind is this; in the absence of any offer for the IP (with or without C14) why have we not seen an offer from an Aussie biotech looking to pickup the massive losses? I'm not an accountant but I would assume those have an underlying value of around $18m to any profitable biotech paying tax in Australia. Clearly there would be no point paying full face value for the losses because you would only break even but even at a discount of 50% that would still be 3 times current market cap, excluding the transaction costs. Is it just too small for any business focused biotech to worry about? Maybe one of the CPAs amongst us has some ideas on this !
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