Avid Bioservices Inc (CDMO)

[peregr]

I think Bluerinse is commenting upon the terms of the financing. While the headline number was 150 basis points on the preferred there was an offset to the conversion price. The current preferred that was taken out was at a ratio of 1.19 shares or $25 in cash. No dilution. My guess is whoever might be holding a large number of preferreds was the investor (s) in the note. While we would all probably be happy with a $28 share price, that is also where the equity dilution would take place. Doesn't necessarily cap a potential buyout but does make it slightly more expensive. Reality is, the dilutive impact would just come from current shareholders at that point.
Bluerinse is correct that this is a pretty sophisticated financing with the initial shorting, buying back and then future conversion. The delta becomes a reduction in interest payments for future equity which the retail investor absorbs. Fortunately, we won't notice as we will see a rising share price with the probable additional revenues from Humanigen and Halo.
It will all work out just that some investors are more equal than others.
Much better than where we were a couple of years ago though.