Cytodyn Inc (CYDY)

[fred198484]

The recent fundraisings are either an indication of desperation or a attempt to raise the most minimal amount necessary before going for a much larger offering once the primary endpoint data is available. Or it may be a combination of both. There is no reason to expect bad primary endpoint data based on historical results (although the phase III combo test is more difficult than the phase II). So, on balance, I have to think that while the small, desperate-looking June fundraisings are concerning, all will be well in the end, at least for the company. The big question now is how large of a fundraising will the company need to do once the good combo primary endpoint data is available? If I am management, I want to do a large amount which would be very dilutive to current shareholders.

If they continue with a never ending series of smaller raises, it might be better for shareholders on the dilution front (assuming the stock price rises over time) but it is also like water torture - drip, drip, drip.

In any event, we should know the answer to the company's strategy regarding raising the needed funds in about a month or so.