KalVista Pharmaceuticals (KALV)

[Toxic Avenger]

The market has already spoken in devaluing CBYL's cash by 60%.

Good question on the the large institutional holders agreeing to take the merger. My guess is that in a liquidation, they have to write off their losses (they bought at much higher prices) immediately. In the merger, they can carry forward the investment and hope for a recovery and if not, at least push off the loss until the timing works out for them.

The new drugs are worth exactly zero. They're just beginning phase I on one and phase II on another. They company may need more cash than CBYL is providing to complete both. And the valuation of the merged company is an accounting calculation. Meaningless.

Stock price is the best measure of whether or not the deal is fair. If you're selling cash at 40 cents on the dollar, then the market is telling you "This deal sucks".