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I like your posts, but I think you are overly pessimistic on the maximum-250-million-share offering. Delcath and Roth should not feel as if it has to do a disservice to the company by failing to get 10 million financing on good terms. They have received good news on a cancer treatment drug, and expect good news in the future.
They may need a lot of funds in the future, which means they should look into partnership or buyout, but short of that, they need to try their best to avoid maximizing their share count at this point when further money will definitely be needed before end of year. I think they can get 10 million for a still-ultra-cheap 10 cents per share, easy.
Right now, I do not think there is anything stopping a company from buying shares at currently depressed prices, then averaging up when they involve themselves in the equity financing. They'd benefit themselves by diluting the company (their investment) less, and by eliminating the need for the company to do another reverse split.
If they are not being acquired this year, then Delcath will definitely need to get more financing at some point, and it simply does not benefit any long-term investor from diluting Delcath another 250 million shares unless they also plan on acquiring the company in the near-term. (And if that's their intent, why bother to wait to acquire the company?)
They have not yet been priced. The way I read it, at least, offering is for a maximum of 250,000 shares, and for a maximum of $10 million dollars. The mention of 4 cents was simply a reference to the stock price at the time of the registration.
PMike's suggestion that stock PPS will go up in order to raise the potential price of the shares being sold is possible.
Even with the upcoming 250 million shares, this is a biotech with a life-prolonging "cancer-fighting" product that has $15-20 million market cap -- or about half the market cap of many biotechs that have both debt and placebo drugs.
No reason this stock should not move higher, significantly higher.
Have they regained ownership of their patents? If so, they should put out a press release stating that. Long-term, this seems fairly safe to go up -- near-debt-free, barely valued for cash on hand, with patents covering a cancer treatment method that has considerably increased the lifespan of some -- and it should be all right if the mgmt updates the market on the current situation.
Congrats on your success. However, as one who did not sell when the stock jumped from 1 to $2.30 or from 5 cents to 9 cents, be smarter than me and always appreciate the momentary success when you're invested in a high-risk stock.
If they open Monday on news that the new 10 million financing has closed, and that some respectable entity has taken a decent position, it's quite possible to lose those profits fairly quick (I would reckon).
Anyway, speaking as a near-bankrupt, near-homeless bum...
If they had 183 million on 1/15, then they are reaching the point where they are allowed to hold onto their remaining shares if they so choose. Unless one is being forced to sell right now to pay bills, etc, then it's an odd time to be liquidating.
I am stuck here (I don't think I could trade my way out of this), but don't much disagree. I had expected they had a buyer lined up when they put out the offering. It no longer seems that way, so have no clue why they rushed to put out the offering. They should have at least allowed a day to pass to allow the stock to recover a little.
I said "tomorrow" just in context to what happened with Savara. They didn't do the financing until the stock had already dropped 50 percent, post-reverse-split, and the financing was for a price lower than the PPS... and yet, the next day, after news came out on the company which invested in it, the stock started going immediately up ... and I recall it jumped a good 50 percent within a week. (And it doubled after another financing later that year.)
Savara wasn't priced for bankruptcy as Delcath is. Delcath, post-dilution-post-financing, is mostly selling for cash on hand, and if a reputable company shows that sees value in the product, by investing in the company, then the stock will be a winner IMO.
If Delcath puts out a press release tomorrow similar to that of Savara (http://savarapharma.com/investors/press-releases/release/?id=2279673) last summer, then the PPS will be just fine.
They need a good company taking a big stake, in part to validate their product, and they need to have some insiders, ideally, to have also invested.
That would make me at least think of my Delcath holdings as an investment, not as a gamble.
The Sept 1 press release should have convinced investors to approve the RS: "If the proposed split is not approved, the Convertible Notes will not be extinguished because the Notes will likely be the primary or only source of funding once the Company is listed on an alternate market."
The one positive is that, once all the dilution is completed, there is still a need for considerable funding that makes the sale of the company likely -- assuming the company has at least some belief in the value of its product.
If a company such as Athenex were genuinely interested in company, why wouldn't they start buying shares now? And why wouldn't they be buying in bulk?
The news was not terrible. I am convinced, when you invest in a biotech whose drug is neither a placebo nor a murder weapon, that you will at least do good on days when press releases report okay news.
But it's impossible to ignore the fact that well-run biotech companies operate much differently. Savara only goes up after financings, in part because their insiders keep investing heavily into the company. With DCTH, where I am almost fully invested, you can't appear to take a day off with the family (which I did last Tuesday) without coming back to a rude surprise.
Personally hope for a few more runs before the dilution is complete -- which would help make a positive from this, if played correctly -- but hard to know if mgmt even concerns itself with PPS right now.
I agree. There's no reason management cannot explain the moves they make. Had they better explained the need for the reverse split when they were still on NASDAQ, I think the majority would have approved it. We are getting diluted a few hundred-fold, mostly as a result of a reverse split being rejected in early September.
Anyway, hope there's a rebound -- even if just temporary -- before end of January. Best of luck to all.
I like most of your posts, which seem to have some sincerity behind them, but don't understand your 8 cents price target, as it would then value the company below or just barely above its potential cash on hand.
Am I misunderstanding the preferred shares, or do they still have an undiluted value to them (whereas the CEO has 4.4 million dollars' worth of shares, the previous CEO has about 3 million worth of shares, etc)?
Since all but the CEO can convert their shares into common shares (and the CEO can, in certain circumstances), does it mean the approx. 1 million market cap is more like a 10 million market cap right now, when fully diluted by those shares?
If so, the dilution should at least be fairly sizable in the future until the preferred shares get converted -- and I would think, if this were near the bottom, they'd be converted after the inevitable post-RS drop, and before the company started approaching a fair or overvalued PPS...
though down 96 percent right now -- enough where I wish your account could block such things as its present value -- I think the run will be interesting when it comes. I am receiving 20 thousand by end of next week, so if luck holds true, the run will start soon and be completed by Thursday of next week.
I personally look at 20 million market cap (plus any monies provided to the company via 3000 percent dilution, etc) as a target.
It will go up to some degree at some point, and it will not go bankrupt -- but when you're down 90 percent, the people pumping insincere optimism are no better than the people saying it will go bankrupt. This was a stock everyone should have got out of after the news of the dilutive financing.
It's amazing to me that I keep investing heavily into the worst stocks in the stock market at the worst possible time.
If I was only like that "club" in the show "Cheers" (Woody's father-in-law's friends) which made such investments on purpose.
Once the note holders are done diluting the stock, how improved are Delcath's debt issues? Is there any positive takeaway to take from this mass destruction?
How does liver cancer negatively affect fewer people than the stock of the company coming up with ways to extend the length of their lives?
Hate my mopey posts -- they are genuine but pointless. Stock will recover to at least a $20 million-plus market cap in no time. It all depends on the ultimate dilution from this note holder before one has an idea what the end price will be.
Unless they do another financing in the next day or two while stock is at these levels -- which doesn't seem likely, but who knows...
good call on having it drop to 50 cent. When it was 75 cents, I simply couldn't sell at 70 percent loss, not after selling ETRM and ICLD at plus-60 percent losses.
Wish I stuck with commodity stocks..
True, my lament is more with the fact I started panic-investing long before there was a reason for me to panic-invest. Now, I'd feel rich if I had half of what made me once feel poor.
Am already heavily invested, so can't exactly avoid, and can't erase my near-fatal mistake of holding after the 8K, but sincere thanks for the advice/recommendation.
Monday would be the third day after the ascending Wednesday stock price, so it's likely one more bad day on Monday (at the very least) in order for the note holders to get a 3 day average based on prices all under $1.00.
I imagine the stock price will move up to around 80-90 cents initially, or maybe even a dollar. If so, I'll likely try to exit on a gamble it will then fall to 50 cents. I hate having to take such gambles, but would probably even be enjoying this currently nightmarish situation for myself if I sold after release of the 8K, then withheld re-entry for at least 3 days after it.
That said, hope it just keeps shooting up on Monday, but it hardly makes sense that it would as it does not benefit the note holders and they have more control over the stock than anyone at this point.
Posting this in hopes someone either tells me it's stupid to make such gambles, and that stock will be $2 within a week, or that maybe someone re-confirms the likelihood that the stock will refrain from going up for at least 3 days after the 8K.
How to lose over $100,000 in less than a year.
The book I am destined to write, the book that is destined to then be rejected by a publisher.
The press releases are being worded somewhat honestly, I think. This sentence ("We can then focus on rebuilding shareholder value through revenue growth and profitability") moves the rebuilding of shareholder value to the future. They are not pretending the current moves help current shareholders, but at some point, they should.
You also said maybe $2.52 yesterday morning, prior to the filing of the 8K. So your opinion at least was temporarily modified by the quarterly.
Have no understanding of a lot of these posts, and the point of them.
I wish they would have at some point openly explained the purpose of their deal with Dominion.
what does this post mean? did they suddenly default?
Between 8:45 and 9:30 Am yesterday, there were 3 posts here -- two of them positive and one thinking that it read like a $1.50 financing. Had all the extremely negative posters said something then, it likely would have been helpful to investors like myself who desperately needed a multi-bagger.
Then again, maybe not -- hope is a hard thing to suddenly kill. Best to all.
With over 20 million in preferred shares now, does that mean market cap is essentially whatever it is now + 20 million? Am I right to think the preferred shares do not depreciate in their value until they are converted into common shares?
Over 6 million on the BID for a moment.If they are converting all notes immediately, that should be good news.
TD Ameritrade shows 3,610,000 on the BID. Either a fake bid -- apparently common -- or one has to assume that notes are being converted to shares.
I hope Rapture is right too, as I am not on sidelines. However, the filing was for $1.50 pr share or the lower of 3 trading days, etc.
If price remains here or less, they can get shares for less tomorrow, and even less further down the line, so likely price stays down here a little bit..
Hope those on the sidelines time their re-entry well.
Actually had bought more at $2 this morning. Please ignore my posts if they ever offer the slightest bit of investment advice.
Quarterly report is out. Improved revenue. Enough money through January, but a financing likely done soon. Personally expect stock to begin a very nice upward climb.