There should be no reason for any dilution towards the end of next year. The $70M we will be getting in conjunction with the close of the merger will be plenty to cover us through at least 2020. That is what was said but with the the relatively low cost of the trials it should last a bit longer. With that being said it is always better to raise cash before you need it. Peter strikes me as a very opportunistic guy so if we build a base anywhere between $15-$20 next year I would not be surprised to see a small offering. In that price range the dilution would be minimal. If that were to happen I wouldn't expect it until later on in the year but I don't have a crystal ball unfortunately.
I do not see any reason for the pps to drop back down to the $5-$6 range. If that were to happen I would be selling everything I had to load up. My ass would be down at the bank getting the biggest loan I could get.
It's tough to determine what the price range will be after the merger. Too many factors go into that and it's impossible to predict them all. I've been using a valuation of $800M - $1.1B that I believe we could hit next year sometime. With ~45M shares outstanding at close of merger that would put that share price somewhere around $17.78 - $24.45. That is if no warrants are exercised. I would assume some will be exercised since they will almost immediately be up 100%. I've calculated ~24.5M warrants at close of merger so if all of them were exercised that would make the fully diluted share count ~70M. At my valuation the SP would be in the range of $11.42 - $15.71. This is just the valuation I am using. As long as we are trading below these share prices I will be accumulating all I can unless the fundamentals of the company change.
Due to the low float and other short term factors I do expect at some point to be trading above my valuation. My guess is the float is currently somewhere around 5M - 6M shares. I strongly believe there have been some institutions accumulating some shares since the announcement of the latest offering and I expect them to continue to do so. This would mean that the float is even smaller than my estimate but I cannot confirm that until all the filings are out. The small float does lead to some volatility which makes it difficult to pinpoint a stable trading range.
When they were soliciting new shareholders to be a part of the last offering they specifically targeted institutions they know typically hold for long term. A large chunk of the offering went to NEA, Aisling, & Perceptive. All of whom, I have been reassured, have no intention of selling anytime soon. Now, there are some smaller entities who are purchasing shares in this last offering and I wouldn't be surprised to see them sell some shares shortly after the merger closes. This will increase the float and should help the share price stabilize provided the shares are not scooped up by new long term holders, locking up more of the float.
In addition to the unknown short term variables that add volatility to the SP we have the known variables from my last post. We should be seeing a pretty decent amount of data and news beginning now and lasting through Q2 of 2019. Provided the data is good this will only add to the volatility as traders will start to try to buy in most likely pushing the share price higher. Especially if the float remains fairly small.
Short term with interim data expected, the filing of the S3, and more conferences to close out the year I expect to push $15 heading into 2019. If the S3 has the surprise I am hoping for we will see a nice jump.
With all of that said, I'm personally looking for a stable range somewhere between $15 - $20 heading into Q2 of 2019. If we get as much news, and it is all good, that I am expecting in Q2 I expect us to trade up even higher but that remains to be seen and I'm not going to make any predictions until then.
Friends don't let friends place market orders
