Vascular Biogenics Ltd (VBLT)

[mantoo123]

Stock offering will raise additional $18.75 million extending operations for an additional year. In case rGBM trial failed, this was the last moment to raise funds. A cautious management team should be expected to prepare for a worst case even if improbable and raising funds at this juncture does just that.

Today's precipitous drop in price reflects in my opinion another possibility, that is, management predicting failure of the upcoming rGBM trial, at least as perceived by outside investors. Management cannot make openly reassuring statements at this time. For instance, it cannot make optimistic statements about the trial outcome without exposing itself to judicial action in case of trial failure.

Let us not forget that the underwriter of the offering is expected to sell the stock at a unit price of $7.50. Buyers will be few if the the stock price remains considerably below $7.50.

Since the offering is expected to close around November 21st, I am afraid it wont complete. It follows that the offering may be an ill-considered move and only positive trial results redressing the balance.

Anyway, we will soon discover how the offering went...