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Could have value - but it is complicated. You should not consider (accumlated tax loss * tax_rate) as any sort of valuation floor.
IRS rules for use of NOL (Net Operating Loss) carryforward are rather Byzantine. There are complex limitations on use of these by an acquirer.
If you want an insomnia cure, try reading Section 382 sometime.
nwbo's Accumulated Deficit is $840m as of year end.
Given how much of that has been funneled through entities (Cognate, Advent) controlled by Linda Powers, do you seriously believe that only $20m of that found its way into her pocket? I'd be shocked if her overall take is under 9 figures.
Then why didn't nwbo announce data lock at the 4/18 annual meeting?
Instead the PR says data lock by "approximately the end of May", which is another 6 weeks from 4/18. How do you reconcile that with your belief there was only 9 days of work left at the end of February?
But it's a presentation of already published info that has already been discussed here. Not sticky-worthy in any way.
Maybe if nwbo was involved, and it wasn't already published in Neuro-Oncology back in November, 2018 (and discussed at length on ihub).
Kab, no, I didn't miss any of that.
If you get stellar results and a large rally, a bit of selling isn't going to matter, even by the CEO. If that scenario were to occur, the warrants only influence dividing up the winnings.
There might be no difference between LP selling shares and selling after exercise. Most nwbo warrants have cashless exercise provisions. She doesn't have a history of putting in fresh dollars, only making loans (all fully repaid with penalty interest and warrant kickers).
You cannot assume that warrant exercise adds funds to nwbo.
Thank you for posting this info.
I think most folks suspected that LP's deal was hers alone, but nice to see first hand confirmation.
I think you are missing several points.
LP's warrants are out of the money. They cannot be exercised profitably without a decent rally in nwbo. So your idea of millions of shares from those warrants being sold into the market is not reality.
If LP's millions of warrants had expired as scheduled, there would be LESS potential overhang. "Potentially dilutive securities" would have dropped.
LP still owns 30m or so shares of nwbo. If she wants/needs to sell, those are not restricted by the 6 months of warrant suspension.
The idea that you are somehow protected is completely false.
Linda's warrant-extension gift to herself provided no funds to nwbo. It has absolutely no impact on whether more funds will need to be raised.
if she let them expire there’d be a whole other round of screaming about her
Now that's a nonsense straw-man argument.
I would have applauded expiration of Powers' nwbo warrants as honest, and pointed out that it would lower the total of "potentially dilutive" securities.
If Linda Powers ever actually puts fresh equity money into NWBO, I will publicly praise that action.
Powers' warrants were set to expire out of the money worthless. She gave up nothing of value while receiving warrants with value.
It is wrong to claim that she is giving up something (whatever trivial value there is to early exercise) when she did not own that time value to give up.
Obviously if the SEC caught GS, they could catch others who rank far lower on resources and business savvy. It seems logical that would have a chilling effect on such activity.
Or did you just miss that the GS news was from 2016 and clearly has no impact on current nwbo short activity?
I wonder if Linda Powers' warrant extension was reviewed by the same folks who reviewed the following.
- violations of the "short swing" rule while she controlled both nwbo and Cognate
- repeat violations of the same NASDAQ rule
- various SEC issues leading to the settlement last fall.
Past history provides ample evidence that either Linda and Les lack knowledge of laws and regulations, or they deliberately choose to play fast and loose.
Powers' actions are completely unethical and indefensible. Even her most ardent apologists should be ashamed of this one.
https://www.sec.gov/Archives/edgar/data/1072379/000110465920055770/xslF345X03/tm2018427d1_4.xml
1. This portion of existing warrants held by Ms. Powers was extended in consideration for suspension of these warrants making them unexercisable until Nov. 1, 2020, and for suspension of other warrants held by Ms. Powers making those unexercisable until Nov. 1, 2020 as well. These extended warrants will have an exercise period of 2-1/2 years after the suspension period.
So Linda gives up the right to exercise soon (why would she ever want to give up time value by exercising early anyway), and gets 2.5 years of extension for essentially nothing.
So what's your explanation for the 91m shares issued in calendar year 2019, when Sawston proceeds were supposed to finance everything?
How about the 195m increase in shares outstanding in 2018?
There is an obvious trend if you open your eyes to see.
I have not studied who owns which market maker, so no comment on that.
There is ample evidence of reasons for nwbo's stock price to be capped. The amount of stock that has flowed into the market is extraordinary.
12/31/2019 shares out (per 10-K): 614.3m
04/19/2020 (per Prospectus): 685m
I think Linda Powers selling 70m shares in a bit over 3 months is a logical and compelling explanation for nwbo's capped stock price.
That explanation works for longer periods as well.
Correct. nwbo not knowing beneficial owners also explains why DI is collecting email addresses. However, that approach is not perfect because they don't know how much you own or whether you still own it. A non-owner like me can be on the list.
Even for stock placements in private offerings, they don't know if it is still held. Once shares are registered, they are fully and anonymously tradable.
There is even less info on the short side due to SEC disclosure rules. Not saying that is right, just that it is the current state of affairs.
The 10-Q for 3/31/2020 should be out in May. It will not reflect any warrant expirations that happen in April/May. It is unlikely to include specifics about warrant modifications, at least nwbo has not published that in the past.
The next 10-Q should include the usual table with:
- number of warrants outstanding
- average exercise price
- average length remaining
By comparing that table to the one from 12/31/2019 we should be able to do some analysis about what has happened during Q1.
If you believe there is massive naked shorting of little nwbo, then you haven't learned much in your years of investing.
Instead of swallowing the Larry Smith koolaid, look for real data. There is no data to support the naked shorting hypothesis. It is just overconfident punters trying to rationalize their nwbo losses as someone else's fault.
Please look at a few numbers and give this some more thought.
Short interest - 5.7m shares.
Warrants outstanding as of year end - 359m
Less than 2% of warrants would be needed to fully hedge 100% of the short interest.
A modest amount of warrant expirations is going to have zero impact on shorting and stock price.
You won't know the amount of warrants expired until the Q2 numbers come out in August. April/May expirations will not be reflected in the Q1 data which is as of 3/31/2020.
Jasinowski is the only Director up for election next year, but he's 81. If nwbo is still around, there could be a Board seat open for you to run.
Shorts have already won. The idea that they capitulate is absurd.
Reminds me of Black Knight from Monty Python's "The Holy Grail" who keeps blustering as his limbs are hacked off.
The next 10-Q will include events through 3/31/20, and a few subsequent events like the April financing.
You won't find out about warrant expirations that occur this quarter until August, when the 10-Q through 6/30/20 is published.
You are correct that the number expiring will be way less than 200m based on the average life numbers in the last 10-K.
New norm? Surely you jest.
"This is not the kind of evidence associated with a failed trial"
This is not the kind of evidence associated with any historical trial. There are no comparable trials. Yet you magically claim that all of that collective weirdness must mean a wildly positive result?
I validated nothing.
Let me invalidate some of your post.
Would investors be better off if nwbo had sold out five years ago? Yes, and dramatically so. 5/1/2017 nwbo price was $8.40, with a much smaller base of shares outstanding. nwbo was flush with cash from the sales to Woodford. Raising cash was relatively easy.
The subsequent value destruction over the past 5 years is stunning.
A new trial would have treated ~400 patients, mostly at top teaching hospitals. Even if dcvax does nothing, SOC at such hospitals is probably better than whatever happened. Instead, ZERO new patients treated.
Unfortunately that is impossible to know. As of 12/31/19, we do know the following:
- 359m warrants outstanding
- 1.42 years average life (17 months, so average expiration May, 2021)
- $0.27 weighted average exercise price.
I am not aware of anyplace the data is broken out in detail. Even if you went back through the history, there have been multiple warrant modification deals that change both expiration and strike price. There have also been further deals in 2020.
Most investors would be better off if nwbo had become a subsidiary of a better funded company. Cancer science might have advanced. Patients could certainly be better off.
Linda Powers might be a tad less rich and out of a job, but still able to retire in considerable luxury.
Doclogic,
nwbo has never explained the hold on enrollment, yet you now claim as fact that the FDA didn't want to enroll further placebo patients?
Got a source, or just choosing a possibility that fits your narrative?
How many years since this trial treated a new patient?
Patients would be a lot better off if nwbo spent the last 5 years running a new properly designed trial (treating ~400 new patients instead of zero) rather than wasting those years trying to cram a square peg into the FDA's round holes.
Despite starting your reply with the word no, most of what you wrote is consistent with my post.
If past trial designs (like NWBO's very old trial) are inadequate, they are unlikely to result in approvals.
You seem to think that means the FDA should ignore all its procedures, ignore bad trial design, and approve dcvax regardless.
I think it means taking everything that has been learned the last 15 years (including the points you mention), design new protocols and endpoints, and run a new trial that actually does prove efficacy.
And as usual, any comparison to Optune is irrelevant (to FDA approval, not to patients) as it was approved as a medical device.
"All of these trials fail because the treatments don't work, but I think a larger part is we're not designing the trials right. But part of it is that it's difficult to provide these trials if you truly want to do what's best for your patient. " - Liau
Wow. Anyone thinking nwbo is a slam dunk ought to read that over many times.
Linda Powers has fed 71m shares into the market this year through early April. Seems like a "BUTT TON" to me. There are plenty of shares available to anyone who needs them.
Thank you for my laugh of the day.
Linda Powers does not pay for anything related to nwbo securities, at least not for the last decade. Her Board gives her these things; outright share gifts, options, warrants for loan forebearance (loan fully repaid, so no fresh cash invested).
You somehow think she would now be treated as a mere mortal, like any other holder of D-1 warrants? ROTFL
Think this through again.
If someone holds "in the money" warrants, they would be getting shares directly from nwbo (cashless or cash exercise). Then they would deliver those shares to their broker to close the short.
There is no market transaction that would affect the pps.
Do you believe that LP's warrants do not have the ability to cashless exercise? Otherwise there would be no reason to leave free shares on the table, and certainly not her style.
My expectation is that her hand-picked Board will extend her warrants and lower the strike price. Or maybe replace the expiring warrants with more 10-year options.
How could they comment on the probability of success if they are still blinded?
They can't. We are in complete agreement on that point.
However, that has not stopped many posters here from believing they did, or from thinking it is a slam dunk success.
No doubt your ASM skepticism is well founded.
Giving some indication that the end is in sight is a positive, if only because it means fewer months to finance hand to mouth. They haven't hit a timeline yet, but maybe this is the one.
What was not in the PR was anything to indicate a higher probability of success. The IDH stuff is likely important to patients and researchers, but noise (and some delay) as far as the nwbo trial. Small subgroups are a topic for future research, not something that gets FDA approval.
Warrants are nothing but an insurance policy for shorts.
Disagree. There are 5.7m shares shorted (per FINRA), and about 350m warrants outstanding, so there's only about 2% of warrants needed for hedging.
The rest is speculative appeal and can be valued. In fact, nwbo's balance sheet values outstanding warrants at $20.2m as of 12/31/2019. The footnotes state that they use Monte Carlo simulation and the Black-Scholes model.
The warrant liability value changes over time with stock price (down since year end, decrease), maturity extensions (increase), strike prices negotiated down (increase), and new issuance (increase). It can also change with assumptions about volatility.
But who is selling at these prices? Linda Powers.
nwbo ended 2019 with 614.3m shares outstanding.
The latest prospectus supplement says that after selling 19m there would be 685m outstanding.
That's 70.7m issued from 12/31/2019 through 4/9/2020, which works out to right around 1m for every trading day.
Linda Powers was a willing seller at $0.153, and actually somewhat lower since there is some value to warrants and warrant extensions.
Your link shows daily shorting by market makers doing their job to balance the books.
That is not the same thing as "short interest" as reported by FINRA.
It is not evidence of naked short selling.