@Michele Hello Michele, always a pleasure to read your posts. Let’s take a look at the #’s from different angles..
Outstanding 12/31/2017 - 119M shares..
Baupost fully conv. notes - 33.4M shares..
Factor-in remaining $72.3M supplement @ avg. $4.50/share - 16M shares
Total Outstanding, Converted, and Supplement (TOCS) projected - 168.4M shares
(Reasons for factoring-in supplement, 1) Need for cash - $93.5M at end 2017, less est. $25M burn 1Q2018, leaves $68.5M at 3/31/2018 (plus 1Q2018 Auryxia net & license revenues, 2) placement of shares for ownership control.)
___________________________
So, projected 168.4M shares including conv. notes and supplement (TOCS). Let’s take a look at ownership..
Baupost - 25.8M plus 33.4M fully converted, total 59.2M shares or 35.2% of TOCS..
Abrams - 9.7M shares or 5.8% of TOCS..
Total Baupost/Abrams - 68.9M shares or 40.9% of TOCS (not quite majority ownership)
Now, if allocate 16M shares from supplement to Baupost/Abrams, brings total to 84.9M shares or $50.4% of TOCS (majority ownership).
__________________________
So, at end 2017, Baupost/Abrams need some 16M addtl. shares to gain majority ownership of TOCS. Where do they get $16M addtl. shares if not from remaining $72.3M supplement? As you point out, from open market purchases, but 16M shares from open market needs..
1) small institutions/funds selling; “hostage” sub-$5 for 5 MONTHS helps..
2) retail selling; at “hostage” sub-$5 not much retail selling (at end 2017, Nasdaq shows retail at 34% or some 40M shares)..
3) closing-out of Top Holders and “transfer” to Baupost/Abrams as in 4Q2017 with Consonance Capital closing-out 5.2M shares and Abrams picking-up $4M (Consonance and Abrams connected, “transfer” of shares, IMO, but need to know connection otherwise passes unobserved)..
Other 7 Top Holders at end 2017..
1- Vanguard - 7.9M shares or 4.7% of TOCS..
2-BlackRock - 6.1M shares or 3.6% of TOCS..
3-State Street - 5.8M shares or 3.4% TKOCS..
4-Rice Hall James Assoc - 1.9M shares or 1.1% of TOCS.,
5-FMR LLC - 1.7M shares or 1% of TOCS..
6-Clearbridge - 1.6M shares or 1% of TOCS..
7-Ameriprise Financial - 1.5M shares or 1% of TOCS..
Other 7 Top Holders total of 26.5M shares or 15.8 % of TOCS (not including allocation $72.3M supplement)
Between Baupost/Abrams and Other 7 Top Holders total of 95.4M shares or 56.7% of TOCS (not including allocation $72.3M supplement)
_________________________
Again, where do Baupost/Abrams get addtl. 16M shares? If not from Other 7 Top Holders closing-out and “transfer” of shares as with Consonance/Abrams, and not from $72.3M supplement, only other source would be small institutions/funds and/or retail selling.
____________________________
Now, how many shares held by retail and small institutions/funds at end 2017? Well, of 119M outstanding (this exercise excludes conv. notes and supplement) you have..
Baupost - 25.8M shares or 21.7%..
Abrams - 9.7M shares or 8.2%..
(Notice, Baupost/Abrams only 29.9% of 119M O/S)..
Other 7 Top Holders - 26.5M shares or 22.2%..
(Notice, Baupost/Abrams and Other 7 Top Holders combined only 52.1% of 119M O/S)
Retail - some 40M shares or 34%..
So total Baupost/Abrams and 7 Other - 62M shares or 52.1%...Retail - 40M shares or 34%..This leaves some 17M shares or 13.9% for small institutions/funds..
_______________________________
Michele, any way you cut it, for Baupost/Abrams to get majority ownership/control, they need one of the following or combination..
1-Top Holders closing-out and “transfer” of shares (represents 26.5M shares)..
2-Small institutions/funds selling (represents 17M shares)..
3-Placement of $72.3 supplement in favor Baupost/Abrams (represents some 16M shares)..
AND the BIGGEST challenge..
4-Retail selling (represents some 40M shares)..
(And, if we’re talking Baupost/Abrams in concert with Top Holders pursuing, say, 85% ownership/control at dirty cheap prior to end game, this would require massive “shake-out” of retail AND small institutions/funds.)
_____________________________
The point being, pps held “hostage” sub-$5, now low $4’s, going into MONTH 4 since start of 2018, IMO, responds to pursuit of massive “shake-out”, with remaining $72.3M supplement also in the cards.
How successful has “shake-out” been? Has there been closing-out of Top Holders and “transfer” to Baupost/Abrams? Has remaining $72.3M supplement been offered and sold? What does Keryx ownership look like at 3/31/2018? The answers to these questions will only be known on May 15th when complete Nasdaq Ownership Report is published.
The Report would/could reveal “machinations” and reflect on pps held “hostage” if it shows steep increase in ownership by any Top Holder, particularly if it shows Baupost steep increase in ownership. Remember, Baupost has shown no activity since conv. notes agreement on Oct. 15, 2015, 21/2 years ago (would be blatantly obvious). In this sense, a change of name prior to May 15th, would render a Keryx Nasdaq Ownership Report void.
But notice, so far, have not mentioned remaining $100 million shelf. In my post, went out on a limb, conjecturing, and wrote “something is in the cards and approaching, around the corner, the question is what exactly and what will be the value of Kerx shares upon announcement.”. This refers more to the ongoing pps “hostage” exaggerated and abusive situation which, IMO, is unsustainable and a pre-cursor to - something has to give soon sort of speak.
With regards to your post, “Your end of game prediction by May 15th is a bold call.”, if you read my post, the “change of name by May 15th” comment was made in relation to remaining $100 million shelf being employed. In other words, IF shelf is in the cards, IMO, the “change of name by May 15th” becomes even more pressing so “machinations” are not revealed in Nasdaq Ownership Report. If remaining $100 million shelf not in the cards, and your point is very well taken, then “change of name by May 15th” as it relates to remaining $100 shelf becomes irrelevant. Regardless, do think “something is in the cards and approaching” (pps “hostage” a pre-cursor) and, with regards to “change of name by May 15th”, do not discard possibility for reasons before mentioned.
Btw, should another round of conv. notes at dirty cheap surface at this juncture (like 1st round of $125M convertibles at $3.74), it would be unconscionable and represent the ultimate dirty blow to shareholders. Don’t see this happening since, again, it would be blatantly obvious.
Finally, to address your comment in reference to remaining $100 shelf ,”issuing that much stock at such low prices to facilitate a takeover would certainly lead to a class action lawsuit. Well, some would say that 5 MONTHS since Innovator Award winning Auryxia IDA approval for CKD non-dialysis, only oral approved treatment of its kind, with pps seemingly held “hostage” and sitting in low $4’s, and drawing from statements made by Keryx mgt. concerning Auryxia IDA launch and commercialization preparations going back 11 months, and IR recently stating “preparing almost 2 years for IDA launch” (as per “holligan” Yoshka/gwells), at the very least, raises serious eyebrows. Nevermind anything else..
All the above, in my opinion..
AI
