I can't say what shareholders will be asked to vote on at the annual meeting, but I do believe that in some way the company will need the flexibility of having additional shares to fund operations, or perhaps permit a buy-in by a partner.
I'm certainly not a big fan of reverse splits, even when intended to be constructive, I find they normally end up with some loss before the price regains parity. Even a small reverse split, say 2 for 3 would be taken as negative by some.
There are no rules for how many shares may be authorized, I'd rather see the authorized shares raised to 1.2, or even 1.5 billion rather than do even the smallest reverse split. Certainly, we'd all like to see the stock on a more major exchange, like the Nasdaq, but I don't believe the way to get there is by reverse split, I believe it's by growing the share price, and I think that will happen once top line data is in, and we'll easily make Nasdaq requirements when a partnership is consummated, or once we have regulator approval of DCVax-L.
A look at other companies shows that companies like GE have over 8 billion shares outstanding, while AMGN has under 600 million, both have market caps of over $100 billion. I find the lower share price of GE more attractive to small investors, while AMGN probably attracts more large investors and Institutions. Certainly Institutions are important, but most can invest once the share price exceeds $5, and that could come rapidly once more is known about the company.
I certainly welcome the thoughts of others, but if you really believe the company needs the flexibility of raising more funds, which I do, think about authorizing more shares and see if that doesn't make sense to you.
Of course it's possible the company won't ask for either at the annual meeting, if all the warrants are converted they'll have adequate funding for now, and they could wait for the need before asking. I doubt if there's a shareholder that wouldn't welcome a partner under the right terms, and those terms may require the partner owning a substantial percentage of the company. Even if perhaps half those shares came from current shareholders tendering their shares at an established price, the other half would be newly issued by the company, which will require a vote that would agree on both the partnership, and the increase in authorized shares.
I would expect that we'll see what the company will be proposing in less than a month, and we'll have some time to discuss it. I really cannot say if the management controls sufficient shares to gain approval of anything they recommend, or not, perhaps others can tell me what's happened in the past. Should the company take on a partner who takes 20% or more ownership in the company it should be realized that the partner effectively has control. It's very hard to overcome a single voting block of 20% or more, though 30% would make it a surer thing when issues come down to a vote. Any partner with that sort of ownership would also be entitled to one or more seats on the Board.
I certainly welcome others thoughts about this.
Gary
