Avid Bioservices Inc (CDMO)

[jbainseky]

I still believe the capacity was built for a specific customer's product(s) when they get approved so there was no real selling to do, but it all comes down to if/when they get approved. Always a bit of a crap shoot with the FDA. Part of the reason I believe that is the fact the 2021 convertibles interest rate was so low. I know rates were lower, but there had to be a better place to put $125M than at a rate of 1.5%, unless you have confidence something big is going to happen. I really wish we knew the holders of those notes, and if it was the original owner that pulled the rip-cord on the removal of the legend. I think it is more likely that that one entity that filed the 13G and specialized in convertible notes was a secondary buyer that knew of the legend situation and he pulled the cord and made money shorting and covering because they knew it wasn't a real financial hit. Now tied into all that is the capped-calls. That did give the original note holders immediate "profit" and this time around there are no covered calls, but AVID did at least change the indenture so the same situation can't happen. On a final note, if my hunch is correct, and the capacity was built out for a specific customer that may or may not want to buy AVID, in either case it has to make HALO more nervous.

FFTT
JBAIN