NorthWest Biotherapeutics Inc (NWBO)

[kabunushi]

Those deals were more straightforward wrt determining a nominal price and value for what was received. In fact the stock was tightly coiled for the double we just saw and also if the tld is as good as NWBO claims it is via informal channels, even more extraordinary volatility will be coming and the new replacement or extension warrants were priced way below actual fair value though at nominal fair value because none of the fireworks had been seen when the deals were done.

I'm saying that the pricing methodology seems to have been straightforward based on historic volatility. The historic volatility was set up to be blown away, but until that happened it would never have been priced in. In a large sense the company seems to have taken responsibility for taking so long to get to tld that they didn't make their planned deadline where the tld reveal event and all its volatility would have been done before the original expiration date. Most longs would prefer to have seen all of the warrants vaporized worthless on May 2 but we have to realize the situation was complicated. The company needed the additional money and also they had something of an ethical obligation to extend the warrants because NWBO moving too slowly caused the situation where the warrants were going to expire worthless rather than remain alive through TLD reveal.

But the case of LP's warrants is different and almost unique. It's much more complicated to place a definite value on the suspension of all her warrants and naturally many are crying foul. But the suspension is definitely not worthless so she got something for something but it's far from clear that she paid fair value for what she got.

In fact there is a very clear benchmark for fair value which is the similar deal with a 3rd party with very similar maybe exactly the same terms attached. It's reasonable to assume that the 3rd party deal was fairly priced as it was a full arms length deal. Whatever they did to calculate the value of the suspension their we ought to and have to assume that represents purely fair value. But in that case 17.5% extension or new warrants were given in exchange for the 80M shares being suspended. If that is fair value and if that deal was under terms exactly the same as the terms LP got which is not 100% clear from the 8-k but seems likely, then Linda got a way over-rich deal. Fair value for her suspending 60M shares would have been 17.5% of 60 or 10.5M new warrants.But she got 29M new warrants and prima facie or on it's face that was an unfair deal and 18.5M of the warrants would be a free gift, or some kind of award of extra compensation to her.

I think that because we have the other deal as a benchmark we can very easily argue that deal would have defined fair value and that it is true in fact that LP measurably got better than fair value. Where anybody takes that is up to them.

I'd like to hear from any others whether or not they agree with the basic principle that the other 3rd party deal should be accepted as setting the fair value and that Linda got appreciably more than simple fair value. Accepting that the other deal represents fair value for the suspension makes it trivial to evaluate the deal LP got.