Diagnos Inc (ADK)

[letskeepitreal]

I would argue that the insider/smart buying already came in with last month's 5,000,000 share private placement at $0.60/share. As the press release Diagnos issued on Feb.7th states: "Up to 17% of the securities issued under the private placement are subscribed by insiders of the Corporation."....so about 850,000 shares at $0.60 were already picked up by insiders for over half a million $. And the balance of the 4.15M shares were picked up by large buyers and "smart money". With every two shares subscribed for entitling the holder to a common share warrant exercisable at $0.85/share and a 4 month hold period in place over these securities, it may be in a lot of people's interest to do whatever it takes (legally) to run this stock up over $0.85 by early June in order to be able to maximize their profits from participating in this placement.

That being said, if the stock is trading at > $0.85 or even > $0.60 after the 4 month hold period expires (i.e. after June 6th), we may see the market flooded with potentially 5,000,000 to 7,500,000 shares being sold off by the participants in order to realize their profits from participating in this placement...it doesn't take a genius to figure out what impact that would have on the stock price...

Given that this private placement had a 4 month hold placed on the securites, and the stock was already trading at around $0.60 when it was announced and the prospects for Diagnos are strong, it actually should have been priced a lot higher than $0.60 (it's interesting to note that ADK was trading at 0.62 - 0.65 the day the placement closed) ...i.e. it should have been priced at some 4 month future price forecast of the company's value. This would have prevented the potential of a serious sell off when the hold expires.