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Thursday, December 04, 2003 10:34:10 AM
Your question, if I understand it, is; Given that the current business climate has Warren Buffet advising investors to hang onto their cash, why would LaJolla invest $8 million if they were not assured of a positive return?
Good question.
However, if someone offered to sell you a 'nickel' for 3 cents that you could cash in immediately would you do it?
Even if there was a million to one against that 'nickel' ever growing to become a 'dime', it would still be a fairly safe investment.
Be assured that LaJolla is not taking any risks in this deal. The PR states that they will not turn loose of one penny until the associated stock is 'registered' (available for immediate sale).
The exchange price will have an instantaneous profit margin built in. If the pps goes up they will benefit immenssly, if it goes down they will still be able to bail and make a profit, but to a lesser degree.
Given the choice between putting the money under the mattress per Warrens instructions or getting long odds on a huge return protected by a guaranteed smaller profit, I'd take the win/win situation. Wouldn't you?
regards,
frog
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