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The shorts have to cover and buy REAL shares and there are not that many real shares out there to trade.
That's what the offering states and no change since it was published..
Facts:
1. Neph needs additional funds to stay in business.
2. FDA meeting info is not yet known but the timing of this offering is exactly the same day (Oct. 15) that the 30 days from meeting expires.
3. The offering kills all shorts. Makes their short shares worthless.
4. Share price is holding in high teens.
5. As the offering is written it minimizes dilution for shareholders.
a. if you owned 10k shares and exercised all offering options it would cost you an additional $875 and after a 20-1 revers split you end up with 2593 shares with 2093 of those shares exercisable for purchasing additional shares at a ratio of .92 @ 2 cents a share.
b. thus you would hypothetically end up with 2093 shares and if 20-1 split happened today the stock price would be $3.60 a share with the option to buy an additional 1935 shares @ 2 cents a share. That would cost you 38 dollars to convert units to share that would be worth $6966. Your 2593 shares are worth $9334 for a total share value of $16,300.
c. Simply stated if your hypothetical 10k shares are worth less than $16,300.00 currently, this offering is a good deal..
My broker concurs. If you own shares and choose not to purchase the units you will incur a pretty massive dilution. Purchasing the offered units minimizes dilution substantially..
So you don't want to buy those shares?
Again the same 10k shares..
After RS you now own 1k shares. YOU sell your shares in 2012 for $4 per share and lose $6 thousand dollars. Break even is about $10 dollars a share if your 10k shares cost you $10,000 before RS..
Theoretically there really isn't any dilution in that if you choose not to purchase shares and or warrants you pay nothing more. Your shares do diminish by 90% but the share price is now ten times what it currently is. The rub is that the PPS generally starts falling shortly after a RS.
Basically NEPH is offering (if my math is correct) current shareholders the opportunity to buy additional shares at 91 cents a share after all options are exercised.
This is what it looks like to me.. Let's say you own 10k shares.
Lets say those 10k shares cost you $10,000.
1. You exercise option and buy max 4.185 shares @ 2cents each. You now own 41,850 plus original 10k shares for a total 51,850 shares. The additional shares cost you $837.
2. Reverse split 10-1. You now own 5185 shares. 4185 of those shares allow you the option in the next 5 years to purchase .9245 shares each @ 2 cents per share.
3. 2012, NEPH share price reaches $4.00 per share.
4. You exercise option and purchase max shares (4185 shares x .9245 per share) which amounts to an additional 3869 shares. The cost for those shares is $77.00 and a few cents.
5. Total cost for shares is $10,914.
6. Total shares owned = 8354 shares.
7. You sell all your shares grossing a total amount of $33,416. Less $10,914 cost for all shares = $22502 gross profit.
8. Total dilution if all options exercised is approximately $914 dollars per 10k shares currently owned. Or $91.40 per 1k shares; or $9.14 per hundred shares; or $.91 and a fraction cents per currently owned shares.
Actually the 20-1 must be a typo since the split refers to "90 million shares and the numbers only work at 10-1. It would have to be 45 million shares @ 20-1. This offering RS does a few very positive things for shareholders.
A. It lowers the float and kills all naked shorts
B. It is basically non dilutive if you exercise all your options.
Here's a quote from Mkuedel, a very sharp Neph long over on the Yahoo boards.
"If the shorts want in, they have to first cover their "fake/naked shorts", then they have to buy REAL shares, that oh by the way, there's a shortage of since none of us have been selling. This creates demand for the shares we hold, because each share is now worth 5.2 shares for a small price (.02 for each additional share). After the R/S, you'll effectively have 1/2 the shares your holding now, but the other 1/2 of your shares will still be available to you as a .09 warrant (at 1.2 warrants per share you own after the split). This is absolutely brilliant Wall Street/Hedge Fund financing at it's finest, and you actually have a chance to participate. "
I see a 20-1 reverse split proposal in the proxy statement.
Case Schiller numbers are out. Ten City up 4.1% Twenty City up 3.2%. California looks very good. If this holds the next few months the bottom is in. Stability is here.
SPF a very strong buy....
The theory behind the RS is that there a many Institutional Investors who will not touch a stock trading in the 5 dollar range. So a split at this point makes MOT a 16 dollar stock and in theory increases the investor market.
You should have sold if you were near break even. Heck I took a 50% loss and was happy for that after being down 90% for months. Anyone long here in my opinion is in complete and premeditated denial of the facts. Blind hope and no reality.
PPS dropping once again with no news. I think the company owes shareholders a PR at least acknowledging the FDA meeting..
I'm no longer a shareholder either. All I can say is thanks for the pump. I was taking a major bath until this pump. Cut that to a half bath.. Anyone who is holding this long term is in denial of what a sound company really looks like. Back to triple 0's..
I'm out. Sold everything @ .0022. Took a 51% loss but thanks to this pump I cut a 90% loss to 50%. This is my last pink. Good luck to all but anyone long is pushing a string. This is a pinksheet scam IMO..
If you were attending what would be the number one question you would ask?
Hey somebody bought 17k shares in the last minute @ .30.. I'll bet that was meeting knowledge purchases.. We fly Monday...
Today: >>It is NOT my contention that EXPH is a business "set up to essentially fleece shareholders out of their investment via fiscal smoke and mirrors."<<
You wrote below Aug. 12 2010
>>EXPH is going nowhere. Misleading PRs can't move it. Nothing can. It is a G&A scheme feeding trough for management. They are the ONLY ones making money these days. Any claims of tremendous 120%-20,000% profits on recent movements of .0002 to .0006 of a cent at this volume are sophomoric nonsense. All IMHO<<
Great post patchman.. I invested in EXPH over a year and a few months ago. Held thru the runup and regret of course.
It appears to me that EXPH is making an attempt at going legit. It is hard to tell whether their past failures are due to ineptitude or as Santa Barbara Broker contends, a business set up to essentially fleece shareholders out of their investment via fiscal smoke and mirrors.
I think your analysis of the Lowe's order is spot on. If the order creates positive sales activity, EXPH does have a chance to generate real revenue but as you state the competition and margins are nothing to sneeze at. It will take a tremendous effort by these guys to pull this one off..
>>$6500+ does not equal painting tape in my opinion<<
Painting the Tape
The illegal practice in which traders buy and sell a specific security among themselves, creating the illusion of high trading volume and significant investor interest, which can attract unsuspecting investors who might then buy the stock and enable the traders to profit.
Read more: http://www.investorwords.com/3573/painting_the_tape.html#ixzz0yJBcQfw6
>>Keep your eye on L2 between 1540-1559 HRS EDT. You are about to witness a game of EXPH musical chairs the likes of which has never been witnessed<<
I'm afraid your above statement was "inconclusive".. But your "circumstantial" argument has merit..
Closing with a flurry..
another mill @ .022 and .0021. That's six grand in transactions..
oooohhh a million @ .0022...
That's a 3.75 cent trade.....
And the first transaction post 15:40 is.....1500 @ .0025.....
>>Keep your eye on L2 between 1540-1559 HRS EDT.<< T-minus 1 minute to either blast off or the sucking sound of JD and his boys dumping shares....
>>Keep your eye on L2 between 1540-1559 HRS EDT. You are about to witness a game of EXPH musical chairs the likes of which has never been witnessed.<<
T minus 5 minutes.........
T minus 10 minutes....
Yah think he knows exactly what Droid sale numbers look like???
Aug 26, 2010 19:28:41 (ET)
DOW JONES NEWSWIRES
Billionaire investor Carl Icahn has increased his stake in Motorola Inc. (MOT) to about 10.4% by spending another $86.2 million on shares this week.
The telecommunications company, which is preparing to split itself in two, last month posted higher quarterly profit and stabilized its long revenue decline, as its wager on smartphones running Google Inc.'s (GOOG) software began to pay off.
Icahn bought 11.5 million shares for $7.50 each Wednesday and Thursday, according a filing with the Securities and Exchange Commission. Last month, he bought 10.2 million shares.
Icahn, who now holds 247.1 million shares, has sharply increased his stake in recent months, as some have speculated that he sees Motorola's value rising when it completes its split, which is set for early next year. At the end of 2009, he owned 119.8 million shares.
Motorola's shares gained 2.7% to $7.70 in after-hours trading. The stock was down 3% this year as of the close.
That's a $7600 plus gain. Pretty impressive. Can't believe this is running..
My Schwab acct. is showing the last buy 100 shares @ .0013. That's a 13 cent transaction. Looks like JD is adding again..
THRR is a classic news, dilute, dump, reverse split and do it all over again..
and from Bloomberg News minutes ago..
>>Jana Partners LLC, a New York-based hedge-fund firm that oversees about $2.7 billion, bought 16.8 million shares of Motorola Inc. during the second quarter, according to a regulatory filing.
Jana’s new stake in the Schaumburg, Illinois-based maker of mobile phones was its third-largest U.S. stock holding after its 4.66 million shares of Charles River Laboratories International Inc. and 5.32 million shares of Coca-Cola Enterprises Inc. as of June 30, Jana disclosed today in a filing with the U.S. Securities and Exchange Commission. <<
link:http://www.bloomberg.com/news/2010-08-16/jana-partners-buys-motorola-stake-sells-pfizer-ebay-ensco.html
Couple weeks ago I picked up Jan 22, 2011 Ten dollar calls for 13 cents a call...
Santa Barbara, can you just hold off on a few posts until this gets to a half cent so I can sell?
>>My guess is you will get your half cent around 9/15.<<
BooYah!!!!!
Just get it back to a half cent so I can sell..