NanoViricides Inc (NNVC)

[loanranger]

This idea was new to me. Not the idea of a company offering shareholders something for nothing....that wasn't new. But the warrant as a dividend idea. So I looked at the example provided at the very end of the message:
"The company LGL Group, Inc used warrant dividend in 2013------ lglgroup.com"

They DID issue such a warrant. It DID trade separately from the stock on the NYSE MKT exchange. A distinction appears to be that LGL Group didn't have a short interest issue that they were trying to fix with it. Instead they explained the action this way:
"Mr. Anderson commented, "We are pleased to return a portion of the Company's future value to our stockholders through this warrant dividend. We see this action as another step in our efforts to enhance stockholder value.""
The share price ahead of the announcement in June of 2013 was around $4 and the combined factors of the PERCEIVED value of the warrant dividend, an M&A deal purportedly in the works and the company's listing on NYSEMKT (with its required buying by the ETF's) acted to move the price to the $6 range in the following few months. They set the exercise price at $7.50, but the warrant couldn't be exercised for five years, except in certain circumstances (see Note).
(LGL had been around for decades at the time of the dividend, with ~$30M in revenues and a 1M loss in the previous year.)

Today (three and a half years later) the shares sell for $4.74 on VERY light volume (avg 1,282/day) and the warrants, which were also temporarily invigorated when they began trading by the same forces that moved the shares, haven't traded in a while. That shouldn't surprise anyone...they are basically worthless.

Whoever brought this proposal forward and provided the LGL example would best be ignored. It shares the same logic exhibited by the "if they get a new name and a new symbol all of the naked short sellers will be exposed" kind of thinking. It's a gimmick and a lousy gimmick at that.

Only one thing will make the short interest in NNVC shrink and that is operational progress. The shorts aren't holding the NNVC price back, NNVC management is.




Note:
"In the context of the Special Committee's ongoing strategic review process, the Board of Directors has revised the terms of the warrant dividend as follows: (i) each holder of the Company's common stock as of 4:30 p.m. ET on the record date, now July 29, 2013, will receive five warrants for each share of common stock owned, (ii) the warrants will be "European style warrants" and will only be exercisable on the earlier of (x) their expiration date, which will be the fifth anniversary of their issuance, and (y) such date that the 30-day volume weighted average price per share, or VWAP, of the Company's common stock is greater than or equal to $15.00, and (iii) 25 warrants will entitle their holder to purchase one share of the Company's common stock at an exercise price of $7.50. The Company intends for the warrants to be listed and traded on the NYSE MKT separately from the Company's common stock, subject to NYSE MKT approval. The warrants are expected to be issued on or around August 6, 2013, and in aggregate, will be exercisable for approximately 522,000 shares of the Company's common stock."
https://www.sec.gov/Archives/edgar/data/61004/000006100413000044/lgl8k_20130717.htm


ps. drrawmd65 covered this well...ignore him at your peril.
One last thought. Any time a company gives its shareholders anything....cash, stock, warrants, furniture....it simply takes value out of one pocket and puts it in another. There is no reason at all that someone with either a long or a short position should be motivated by such an action with one possible exception...it smacks of desperation and might draw the attention of short sellers who perceive that.