Anavex Life Sciences Corp (AVXL)

[Gator328]

"You don't do a direct offering and then release bad news!!"

Well, sometimes you may do that if you're not concerned about the long-term. If it's a matter of duping investors or running out of cash, some CEOs will operate under the assumption that investors are a dime-a-dozen.

For the record I am not saying that the offering implies bad news or that Dr. Missling doesn't care about the shareholders. I'm slowly warming to some of his business decisions, including the additional authorized shares, the blank check preferred shares, etc.

I believe this was Dr. Missling being conservative for a single inning of a game that he's aggressively playing to win. Sometimes you have to bunt to advance a runner to the next base. Raising $50mm for just 2mm shares gives the company a sufficient cash runway to do many interesting things, from building an internal manufacturing and marketing infrastructure to funding a new trial for a new disease (autism or epilepsy?) to advancing A371 into a P2 trial.

I also understand how people can wonder, "In light of all this seemingly good news, why raise money now when you can wait a few months and raise at an even better valuation?" And I think the most likely answer is that Dr. Missling has found himself in a situation where he's got a runner on 2nd base, no outs, so why not play it conservative and take the money while it's available?

(Sorry for the baseball analogies, I just finished watching last night's Reds game)