Why the talk of financing being toxic is false and misleading..
remember "we are protected by terms"... "Missling is smart":
Ok, firstly contract terms are that Lincoln can not short AVXL stock. Another important aspect is that Lincoln will not know when , or even if (since AVXL is still not committed to using the Lincoln share sales and can still pursue partnerships and other financing sources) , Anavex will request a sale of shares, under the contract . Since Lincoln will have no knowledge of what Anavex will request, and plus the fact they are not allowed to short AVXL by contract, Lincoln has no reason (or ability) that would benefit them, to manipulate the share price of AVXL, so that they can "buy more shares for given amount" .... This gets to the reasoning why using the scare term "Toxic" is misleading .... because the term has typically been used in financing with warrants where the company has no control over the issuance of shares, or shorting by subject company, and so the company can "at will" short to lower the price, and then use this lower price so that the warrants convert into more shares, then convert some of the shares at the higher ratio, sell those at market, short more as needed to push down price even more and then do the cycle all over again (almost resulting in an unlimited amounts of shares to be issued potentially) ... google "toxic death spiral financing" and you will get a lot of info if you want more....but the point is the term toxic is not accurate at all in the AVXL financing (in fact very misleading surprise surprise). In the AVXL case Lincoln will simply get a 10% discounted share price, based on market value, and will have to pay for the shares, when and if AVXL requests ---- no warrants and zero control by Lincoln in this process, and no shorting allowed. This is why the term "Toxic" is here is very misleading. Also add on that if Nov. 7 AVXL conference is positive, resulting in high partner demand , and high share demand, and AVXL's very selective use of the Lincoln financing (Missling has an MBA with extensive M&A experience) will allow share price to float to fair value...
