What happens when ..., page-9

@madamswer thank you for sharing the above, it does describe what can and does happen in disallowed.

And although it is not a great feeling knowing that some parties get a leg up on the retail investors - the reality is that in every market or industry you participate in, the consumer/retail investor/end-user always gets screwed.

For example, I do not mind paying $150 for a shirt made in Italy - even though it's cost to produce is probably $10 and the manufacturer, importer, distributor, govt etc each take their share of the $150.

So rather than choosing not to invest into companies that need access to equity capital, it may be wise to look at each Company's situation on a case by case basis and put each's company's situation into context.

So what you say above may be right in this instance... in that 3.6m shares were traded at $2 to allow some short positions to be covered and minimise their loss. However there is still around 19m out there that need to be covered, and at the current trajectory, do you think the 19m shares can wait for the 'next capital raising' to cover their positions ... assuming there will be a 'next capital raising' that is. Will they really sit on their hands and wait to get that 15% benefit over the retail investor, and risk losing another 50%, 100%, 200% .. get the drift?

If MNK comes through with upfront cash, and/or another partner comes into play for CHF or RA ... how would they cover their 19 million shares?

The poor investor who gets diluted can only lose their capital, whereas the short seller has unlimited loss potential... UNLIMITED!

Speaking of which, Silviu is obviously a large shareholder ... so these capital raising dilute his holdings too - so he wouldn't be going out and doing dud deals to his own detriment.

Which brings me back to my initial thought ... MSB is in late stage development, without meaningful revenue yet, and as you re-itterate, it is not yet self sustaining. So capital injections are required, call it a necessary evil.

If we avoid investing in companies like MSB because there is a chance of dilution, then we would miss out on the opportunity to buy shares at sub $2 and even close to $1, which would mean retail investors could miss out on 100%+ and 200%+ returns respectively. So would the retail investor mind if over time their share holding gets diluted if they can walk away with three or four digit % returns? I think not. In fact without these capital injections, MSB would be worth $0.

And if and when MSB does become self-sustaining, rather than paying $1 or $2, the entry price is likely to be closer to $10+, or up to 1000% more. But hey, at least there won't be dilution then!