Actually, she had innovative financing in place with their supplier Cognate to keep dilution down very low. Cognate paid for manufacturing, and received shares that were well priced. And Cognate agreed to hold those shares and not turn their costs into cash indefinitely.
The restriction was, and it is typical in such agreements, that if shares were directly offered at a lower price, the shares Cognate held for their costs, which were a dollar amount, would be topped up, so that while they were holding, they were assured that they had full payment. This is called a most favored nation’s clause. They get the pricing benefit of subsequent financiers.
Shorts look for companies that have contracts like this. Then they create false light campaigns to collapse the share price. You can get a whole lot of people participating in such campaigns who are really just day traders also. It’s unfortunate.
They collapsed the price under a dollar, got the company in a position where it had to provide cognate many more shares and caused the issue that they had to issue those shares AND stay solvent, with a much lower share price. Shorts took advantage of these conditions. In reality, they know the company is no “scam” and that DCVax-L is completely legitimate, but they simply do not care and will say absolutely anything to maintain the low price.
The great thing for funds that do these trades is, if they can keep a share price that they shorted like this very low, they can finance based on their portfolio, with their investment bankers, leverage it and keep printing money, without covering or selling. And they can keep rolling forward their tax event for years, and avoid margin calls if their other investments (short positions potentially) are not as lucrative or even “up”, meaning a loss for them.
So sometimes it is critical to delay and defer covering, because the value of it is just too good and then they hope the company fades and goes bankrupt but maybe not for many, many years. No taxes almost forever. For them, it’s such a good deal, it’s almost like it is subsidized money.
Bullish
I own NWBO. My posts on iHub are always posted expressly as just my humble opinion (IMHO) and none are advice, just my opinion. I am NOT a financial advisor, and it is assumed that everyone is responsible for their own due diligence.
