GTC Biotherapeutics (fka GTCB)

[jessellivermore]

Dilutions

We GTCB stock holders know them well. Your'e sitting there thinking the company's poised for a big move upward when it comes like a sudden unexpected rainstorm on the third hole. The announcement of an "offering" to be handled by.....After which comes the all too common decline in PPS.

Dilutions come in different varieties. The worst is the Malignant Dilution. The MD comes when the company feels its stock is over priced and wants capital. If you are in this situation and the finacial institution doing the deal is less than 100% scrupulous, you run the risk of those in the know shorting the stock before the announcement. Dumping the offered shares, causing the price to fall, follwowed by closing out their short positions.

On the other side of the coin is the type of dilution most likely in this recent deal with LFB. I call this a DeBeers Dilution. The diamond synicate has for almost a century concocted the most elaborate con ever to artificially maintain the price of diamonds well above their worth in an open market. The ruse involves a virtual monopoly among other things but my interest is the way in which they keep a common commodity scarce. Ever hear the expression "A diamond is forever"?? Well what that means to most women is that if they get a diamond they should hold onto it. Because most women do hold onto their diamonds, or trade up, it has the effect of taking diamonds out of circulation. This aids to the creation of the illusion of scarcity and increases their value.

IMHO Since the principal reason LFB (State owned) wants these shares is to maintain connection to GTCB and gain representation on GTCBs board. They need this if they believe transgenics is going to be a big part of their protein business. They also could be considering this from a defensive position. I wouldn't be surprised if this was a condition imposed by the French governement. My guess is these shares end up in a secure vault and dont see the light of day unless something very unusual happens. Shares that are locked out of the float don't directly figure in the supply and demand aspect of market action.