22nd Century Group Inc (XXII)

[petemantx]

I personally see no chance of a buyout at this stage for the whole company. The talk that XXII needs Big Tobacco on their side to get the MSA/FDA approvals going makes me believe some part of the cigarette IP could be leased or sold to one of the Big 2 firms but I am sure not expecting it. I just can't see a big buyout of all cigarette IP at this time as there has been no chance to see how Brand A/B will be received by worldwide consumers so how could either side have the faintest idea of the worth of the IP?

We could be given $25B for the company (I just picked a really big number, not gonna happen as Big Tobacco couldn't justify a large premium of any size for a company with no sales as of yet) and 5 years down the line realize we gave away the company for pennies and they certainly aren't going to gamble on a large premium without proven positive results.

Edit: Note that many will look at the $25B number I picked as a total joke but if what we have been told is correct, that each .1% of the world market is worth $1B in market cap, that means that our cigarette IP would only have to capture 2.5% of the world market to justify a 25B market cap. Does anyone think our DISRUPTIVE IP will only capture 2.5% if it can decrease tar/car... by 80% with no loss of smoking pleasure?

As such, how can anybody today come up with a proper premium for a part of XXII cigarette IP? If it happens, I think all current stockholders lose big time in the long run. The only reason I can think mgt would agree to such a development would be if they know the MSA/FDA approvals are going to be held up via the influence of Big Tobacco on NAAG/FDA and they are forced to sell some of the IP so the company can move forward on their other fronts. If such a development occurred, what position of power would XXII be holding to force a large premium? The only thing we could hope for is a full blown bidding war.

Regarding any buyout, once a PR is given showing the price being offered by the buying company, the stock price normally rises to a level just below the buyout price. Many holders will sell immediately in case the deal falls thru and to get their profits (or at least the vast majority of their expected profits) right away.