Anavex Life Sciences Corp (AVXL)

[Gator328]

LPC buys shares and immediately sells them onto the open market. How do you think they profit from that?

Hint: more often then not, these funds take short positions simultaneously.

It very well may be that Missling didn't have any other options to raise cash. Lenders aren't exactly keen on giving money to startup biotech with zero revenue-producing assets.

That said, there is a reason why venture capital firms are so widely sought after. If LPC were the best place to find money, wouldn't everyone be using them?

Anavex was severely diluted because of its association with LPC. If the drug works its a moot point. But it isn't necessarily true that it was the best available source of money -- as you said, it was on the OTC with very little to show for itself back then, so it was probably the only source of money.

But what about an offering to existing shareholders? That would have gotten them an influx of cash without being dilutive to those who participated. And more than likely, the offering would've been oversubscribed.